Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, June 2. In today's briefing, a federal appeals court gave back majority control of Sanchez Energy to its bankruptcy lenders, Charlie Ergen's telecom company skipped an interest payment and Steward Health Care took on loans for a $2 billion litigation campaign.

Sanchez lenders regain full control of driller five years after bankruptcy. A federal appeals court on Friday restored ownership of a formerly bankrupt oil driller to its top lenders Apollo Global Management and Fidelity Investments while stripping control from a rival group of investors.

The U.S. Court of Appeals for the Fifth Circuit reversed a bankruptcy judge’s 2023 ruling limiting Apollo and Fidelity to a roughly 30% stake in oil driller Sanchez Energy and giving majority control to unsecured creditors.

The bankruptcy court should have awarded Apollo and Fidelity 100% of the equity in Sanchez, according to Friday’s ruling. The appellate decision allows Fidelity and Apollo to regain control of the company, now known as Mesquite Energy, following its emergence from chapter 11.

Ergen's Echostar skips debt payment. Telecom mogul Charlie Ergen’s Echostar elected to miss a $326 million cash interest payment to bondholders after federal regulators questioned his company’s use of cellular and satellite spectrum licenses.

Echostar said in a regulatory filing that the recent action by the Federal Communications Commission "adversely impacts our ability to implement and adjust our overall business plan and requires us to re-evaluate the deployment of our resources." The missed interest payment on bonds backed by spectrum assets starts a 30-day clock for the company to make up the payment before bondholders can declare a default.

The FCC in May told Echostar, which owns both the Dish Network pay-TV brand and Boost Mobile's wireless service, that agency staff would investigate the company’s compliance with federal requirements to build a nationwide 5G network. —Andrew Scurria

• Earlier: FCC Threatens Charlie Ergen’s Hold on Satellite, 5G Spectrum Licenses

Climate startups are pausing operations, cutting staff and entering bankruptcy as Trump policies bite. Climate startups are feeling the impact of President Trump’s attacks on the energy-transition sector, as funding and job cuts, operational halts and bankruptcies rack up.

From carbon capture to solar power, companies across the clean-tech spectrum are reeling from funding withdrawals, policy changes and import restrictions brought in by the Trump administration as it has set about dismantling the climate goals of its predecessor.

On Friday, the Department of Energy announced $3.7 billion worth of funding cuts for clean-energy and climate projects, with a large portion of the cancelled grants focused on carbon capture and sequestration. Of 24 projects terminated in the move, 16 were signed between election day and Trump’s inauguartion, the DoE said in a statement.

Steward Health approved to take on new loan to finance clawback litigation. A bankruptcy judge approved a settlement between Steward Health Care and its top-tier lenders Friday for the company to take on an additional $127 million loan to fund litigation against former insiders of the hospital chain.

With the ruling, Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston overruled objections that the new loan would award the bulk of the litigation recoveries to Steward’s top lenders, leaving less for other creditors, including those with essential bills for goods they supplied to Steward’s bankrupt hospitals.

Massachusetts and the other parties argued that the settlement would give the company’s top-tier lenders the bulk of any litigation recoveries, which are the most valuable assets left for creditors of Steward, one of the largest hospital systems to fail in decades.

The law firms that appeased Trump—and angered their clients. In interviews, general counsels expressed concern about whether they could trust law firms that struck deals to fight for them in court and in negotiating big deals if they weren’t willing to stand up for themselves against Trump. The general counsel of a manufacturer of medical supplies said that if firms facing White House pressure “don’t have a hard line,” they don’t have any line at all.

Since late February, Trump has issued a half-dozen executive orders that direct agencies to remove law firms’ security clearances, limit access to federal buildings and remove their clients’ government contracts, citing connections between those firms and the president’s enemies. Trump has said many law firms have weaponized the legal system to hamper the work of the administration.

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