Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, July 7. In today's briefing, a look at the risks to residents of continuing care retirement communities when they go bankrupt. Hilco Global has agreed to sell a 70% stake to Japan’s Orix in a deal valuing the firm at $1 billion, as it shifts focus to asset management and advisory services. And a court-appointed special master recommended a $7.4 billion bid from Gold Reserve-backed Dalinar Energy for Venezuela’s Citgo Petroleum, nearly doubling prior offers in the ongoing auction to repay the bankrupt country's creditors.

Senior facility bankruptcies hit residents. The Harborside continuing care retirement community in Port Washington, N.Y., struggled to recruit residents and went bankrupt three times. Finally, the owner sold the business to an investor who is scaling back on the level of care offered.

But because of the way bankruptcy proceedings work, secured creditors get paid before residents. Among nearly 2,000 of these types of facilities nationwide, at least 16 of them have filed for chapter 11 since the outbreak of Covid-19 in March 2020.

Chapter 11 filings rose during the pandemic period primarily because these facilities didn’t have enough new move-ins. Those 16 bankruptcies wiped out more than 1,000 families’ savings totaling at least about $190 million accumulated over decades, based on the Journal’s analysis; 212 of those families were in Harborside, a Harborside lawyer said at a May bankruptcy-court hearing.

Hilco Global, a financial-services firm, plans to sell 70% of its equity interest to Japanese investment firm Orix as it pivots to focus on asset management and advisory business, according to people with knowledge of the matter.

Orix’s U.S. business has agreed to the deal that values Hilco at roughly $1 billion, the people said. The firm’s management team will own the other 30%, the people said.

Northbrook, Ill.-based Hilco will also launch an asset-management business, dedicated to making investments in private markets focused on asset-based financing, the people said. Orix, publicly traded in Tokyo and New York, has agreed to commit $1 billion as the anchor investor. Its U.S. asset-management arm manages nearly $90 billion in assets in credit, real estate and private equity.

A court-appointed special master recommended a nearly $7.4 billion bid from Venezuela creditor Gold Reserve for the country’s state-owned oil refiner Citgo Petroleum, roughly double the prior leading offer.

Robert Pincus, the special master overseeing the forced sale of Venezuela’s stake in Citgo, said in court papers filed Wednesday that the bid from Gold Reserve’s Dalinar Energy is the highest and best offer. Citgo, among the largest U.S.-based oil refiners, is being auctioned to cover debts owed to bondholders and multinational corporations by its owner, the bankrupt Venezuelan government.

Dalinar is backed by Gold Reserve, which holds a $1.1 billion judgment, as well as two subsidiaries of Koch, also a judgment creditor of Venezuela. Dalinar emerged as the leading bidder, or stalking horse, after the special master previously designated offers from Elliott Investment Management and Contrarian Capital Management as lead bids.

In the first half of 2025, chapter 11 filings fell 15% to 3,576, down from 4,205 a year earlier, reflecting a continued decline in business reorganizations in bankruptcy, according to data provider Epiq AACER. Subchapter V filings by small businesses also dropped 4% to 1,183 in the period. Overall commercial bankruptcies dipped slightly to 15,188.

But a rise in individual filings drove up total bankruptcy filings by 10% to 276,126, according to the data provider. Chapter 7 filings surged 15% as households faced rising debt, high interest rates and resumed student loan collections.

It was a match made in fast-food heaven—stocking McDonald’s locations with freshly baked Krispy Kreme doughnuts.

The Golden Arches had been looking for ways to perk up its breakfast sales. The 84-year-old doughnut brand wanted to expand its reach by selling more products with larger partners.

Nearly three years after McDonald’s began carrying Krispy Kreme doughnuts in some of its U.S. locations, the experiment is over. The pastries are leaving McDonald’s menus this week.

Krispy Kreme’s top finance executive, Jeremiah Ashukian, is leaving the doughnut maker to pursue an opportunity with a private company.

Krispy Kreme on Thursday said Raphael Duvivier, who has served as president, international, since January, will succeed Ashukian as chief financial officer on July 11.

The departure of Ashukian, who joined Krispy Kreme as executive vice president and chief financial officer in January 2023, comes on the heels of the Charlotte, N.C., company’s break-up with fast-food giant McDonald’s.

Air France-KLM said it would increase its stake in peer Scandinavian Airlines, or SAS, to 60.5% from 19.9% by acquiring the full stakes held by Castlelake and Lind Invest.

The value of the stake will be determined at the closing of the deal and will be based on SAS's financial performance. This will include its earnings before interest, taxes, depreciation and amortization, and net debt performance, the group said.

Castlelake currently holds 32% of SAS, while Lind Invest holds 8.6%

Air France said Friday that the deal builds on the commercial cooperation agreement signed in 2024 between SAS, Air France and KLM.

The increased investment reflects the successful turnaround of SAS, the group said.

In August 2024, SAS exited chapter 11 bankruptcy proceedings in the U.S. as part of a company restructuring. This included restructuring more than $2 billion in debt and saw Air France-KLM, Castlelake, Lind Invest, and the Danish State invest to become the principal owners.

Air France-KLM said the deal would generate synergies while allowing it to expand into the Scandinavian market.

The Danish state will retain its 26.4% stake in SAS and its seats on the board of directors.

The deal is subject to regulatory approvals and Air France-KLM expects it to complete in the second half of next year.

––Adam Whittaker

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