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Biotech Venture Fund Goes Bankrupt After Battle With Billionaire Backer
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Thursday, Dec. 11. In today's briefing, an Apple Tree Partners life sciences venture fund filed for chapter 11 amid allegations that its liquidity-constrained Russian billionaire backer failed to meet financing commitments. And with the return of megadeals, so has Wall Street’s immense appetite for debt: This means large paydays for shareholders but more risks for bond investors.
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Kyle Grillot/Bloomberg News
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Venture firm puts billionaire-backed fund in chapter 11. A life sciences venture fund run by Apple Tree Partners filed for bankruptcy after alleging that its Russian billionaire backer hasn’t met financing commitments because of liquidity problems at his family office.
Apple Tree had previously sued Dmitry Rybolovlev's family office, to enforce alleged funding commitments for its portfolio companies. Earlier this month, the Delaware Chancery Court ordered Rybolovlev’s family trust to pay $97 million to Apple Tree to help fund several portfolio companies.
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Mario Tama/Getty Images
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Debt-fueled deals are back on Wall Street. Paramount's hostile bid for Warner Bros. Discovery this week, the leveraged buyout of gaming company Electronic Arts earlier this year and other recent debt-laden transactions have all been possible thanks to a spike in lending by banks and even some private-credit funds.
Debt-heavy deals mean large paydays for shareholders but also more risks for bond investors when credit markets are showing signs of overexuberance. And would-be acquirers have more choices than ever. The corporate-bond, syndicated-loan and private-credit markets are all whirring at the same time.
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“These big, bolder bets are becoming more interesting, and people are willing to try them because of the financing that’s available."
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— Matthew Toole, director of deals intelligence at London Stock Exchange Group
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The number of commercial bankruptcies filed in August, a 3% decrease from a year earlier, according to data from Epiq AACER. 200 small businesses, meanwhile, filed under subchapter V of chapter 11, marking a 17% increase in the period.
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