Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Thursday, June 4. In today's briefing, Sleep Number is preparing to file for chapter 11 bankruptcy to execute a corporate restructuring that may include a sale as it struggles with high debt and poor financial performance, sources told WSJ Pro Bankruptcy. And pharmaceutical drug discovery company Inotiv has filed for bankruptcy as part of a prepackaged restructuring agreement with creditors aimed at slashing its debt by roughly $326 million.

Sleep Number is preparing to file for bankruptcy as the mattress maker contends with a high debt burden and deteriorating financial performance, people familiar with the matter said.

The Minnesota-based company is aiming to use the chapter 11 process to complete a reorganization that would keep the business intact and may involve a potential sale, the people said. A representative for the company didn’t respond to a request for comment.

Sleep Number said in a securities filing Tuesday that it is providing a one-time cash retention bonus to some of its top management, including its chief executive officer and chief financial officer.

Inotiv filed for voluntary chapter 11 bankruptcy to reduce its debt by roughly $326 million.

The drug company said Wednesday it entered a restructuring agreement with lenders and junior creditors, which included filing for bankruptcy in a Texas district court. Inotiv said it will maintain normal operations without disruption.

Inotiv has received commitments for $25 million in new money debtor-in-possession financing, which follows $40 million in bridge financing provided in May. The funds will be used to support business through the bankruptcy process.

As part of the restructuring agreement, Inotiv has started soliciting votes in a pre-packaged plan of reorganization. It has secured the affirmative votes of holders of the necessary majorities of all tranches of its capital structure under its credit agreement and bond indentures.

Inotiv expects to seek confirmation of the reorganization plan and emerge from bankruptcy on an expedited basis, it said.

–Katherine Hamilton

The federal government’s bankruptcy watchdog is asking the settlement fund set up in the Boy Scouts of America’s bankruptcy to provide an update on its operations, including its procedures and expected payouts for sex-abuse survivors. 

The U.S. Trustee said in a filing Tuesday in the U.S. Bankruptcy Court in Wilmington, Del., that it has seen “an appreciable increase” in queries from survivors who were told their claims would likely be paid in full. But, so far, most payments have amounted to less than 5% of their claims – “a more-than-significant reduction” from what was expected, the U.S. Trustee said.

The bankruptcy court approved the youth group’s reorganization in 2022 with a projection that the claimants would likely be paid in full. The settlement trust, established in 2023, has since warned that claimants are unlikely to be paid in full. The trust had no immediate comment. 

–Becky Yerak

Venezuela’s acting President Delcy Rodríguez is facing growing resistance from an unlikely source: the leftist movement that brought her to power.

Five months after U.S. commandos ousted strongman Nicolás Maduro, figures within the ruling socialist movement known as Chavismo—after former President Hugo Chávez—are openly criticizing Rodríguez for accommodating Washington as she works to stabilize the country and deepen ties with the Trump administration.

Former ministers, party intellectuals and leftist voices accuse her of surrendering sovereignty, opening the economy to foreign interests and sidelining loyalists who spent decades building a movement partly defined by opposition to U.S. influence.

Partners Group limited redemptions from a flagship private-markets fund because of high demand from investors to get their money back, prompting a sharp sell off in the shares of the Switzerland-listed private equity company.

Partners Group told investors in the $8.6 billion Global Value Sicav fund that it had to limit withdrawals to 5% in the second quarter, after redemption requests rose to close to 10% of the fund’s value, a Partners Group spokesperson said Wednesday. The buyout-focused fund invests in private equity and debt of hundreds of companies, among other private-market assets.

Share your tips, suggestions and feedback with the WSJ Pro Bankruptcy team: Alexander Gladstone; Jodi Xu Klein; Akiko Matsuda; Alicia McElhaney; Becky Yerak. 

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