Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Tuesday, May 19. In today's briefing, Alex Jones’s attempt to shield Infowars media platform in his personal bankruptcy case was rejected on Friday, a step closer to liquidating the conspiracy site as families owed $1.4 billion in Sandy Hook defamation judgments seek to collect. And boating supplier West Marine filed for chapter 11 to close stores and pursue a sale or hand control over to creditors, weighed down by inflation and weakened post-pandemic demand.

A federal district judge on Friday rejected conspiracy theorist Alex Jones’s bid to shield Infowars from liquidation, upholding a bankruptcy court ruling that the assets aren’t protected by his personal bankruptcy estate.

The decision by Judge Lee Rosenthal of the U.S. District Court in Houston removed a key legal maneuver Jones used to maintain control of the platform. The ruling brings Infowars one step closer to a court-ordered sale intended to help satisfy roughly $1.4 billion in defamation judgments tied to Jones’s false claims that the Sandy Hook Elementary School shooting was a government hoax.

West Marine filed for bankruptcy to deal with a bloated store footprint, inflation pressures and softer boating demand as consumers returned to pre-pandemic routines.

The Fort Lauderdale, Fla.-based boating supplies retailer entered chapter 11 Sunday with $549 million in debt. The company has a proposed restructuring agreement with nearly all of its lenders, including Eclipse Business Capital, L Catterton and Oaktree Capital Management.

West Marine said it plans to close some of its 200 stores and seek a buyer for the business or hand control to creditors, according to filings in the U.S. Bankruptcy Court in Wilmington, Del.

West Marine’s expansion into clothing, shoes and water toys backfired as consumers reduced their spending after the pandemic. Supply-chain disruptions and frequent, severe weather during peak boating seasons also left the company with aging inventory, Chief Executive Paulee Day said. The company, which has roughly 2,600 employees, remains open for business.

—Becky Yerak

• Earlier: West Marine, a retail chain that offers boating and fishing supplies, has reached a deal to restructure its roughly $800 million of debt out of court, according to people familiar with the matter.

Shares of Bitcoin Depot plummeted nearly 75% in premarket trading Monday after the Bitcoin ATM operator filed for chapter 11 bankruptcy with plans to wind down its operations and sell its assets.

Bitcoin Depot said its business model has become unsustainable given significant shifts in the regulatory environment for Bitcoin ATM operators.

The Atlanta company said states have imposed increasingly stringent compliance obligations, including new transaction limits, and, in some cases, outright restrictions or bans on Bitcoin ATM operations.

Bitcoin Depot said it has taken its network of Bitcoin ATMs offline, adding that its Canadian entities are included in the U.S. court-supervised process, and that it expects to commence restructuring proceedings in Canada in due course.

Shareholders are generally wiped out in bankruptcy cases, and Bitcoin Depot shares, which closed Friday at $2.93, were recently down 74% to 77 cents in premarket trading.

—Colin Kellaher

Matthew Roose, the deputy leader of Ropes & Gray’s business restructuring group, has left the firm to join Gibson Dunn.

Scott Greenberg, the global chair of Gibson’s business restructuring and reorganization practice group, said that “Matt combines exceptional creditor-side fluency with extensive liability management experience and strong credibility with our existing client base.” Roose will continue to be based in New York.

While at Ropes & Gray, Roose represented creditor ad hoc groups in chapter 11 cases including Luminar Technologies, Wolfspeed and Exela Technologies, as well as Aimbridge Hospitality in an out-of-court restructuring. He also represented Hearthside Foods as a debtor in its bankruptcy proceedings.

Gibson Dunn has been expanding its restructuring practice in recent years with a number of lateral hires.

—Alexander Gladstone

Willkie Farr announced Monday that two finance and restructuring partners, Gregory Gartland and April Doxey, have joined the firm from Winston Strawn.

Willkie’s Americas chairman Craig C. Martin said that the firm is thrilled to welcome Gartland and Doxey, describing them as “first-rate lawyers with deep roots in the industry and experience leading complex finance, liability management and distressed transactions for clients worldwide.”

While at Winston, Gartland focused on lending transactions and both in-court and out-of-court restructurings. Doxey is known for her work in private credit, and has advised on recapitalizations, out-of-court restructurings and leveraged buyouts.

Gartland served as co-chair of Winston’s financial restructuring practice, while Doxey was co-chair of its private credit practice. At Willkie, the two are now members of the firm’s finance department, and are based in its Chicago office.

—Alexander Gladstone

Federal prosecutors are probing a BlackRock private-credit fund that surprised investors with a sharp write-down of its loan portfolio earlier this year, according to people familiar with the matter.

The Manhattan U.S. attorney’s office is investigating the valuation practices of BlackRock’s publicly traded TCP Capital fund, the people said. Bloomberg News earlier reported on the probe.

To paraphrase Winston Churchill, investing in a business-development company can be like buying loans, wrapped in a fund, inside a stock.

Some investors may be tempted to jump into these publicly traded private-lending vehicles, which have been beset by concerns about the credit risks of borrowers like software companies. Many of these vehicles are currently available at deep discounts to their asset values, sometimes with high dividend yields. Be greedy when others are fearful, they say.

Barings has rounded up over $19 billion for its global direct-lending business, despite negative headlines plaguing the private-credit market.

Retail capital has headed for the exits as individual investor enthusiasm for private credit has waned, but Barings funds as a whole draw 80% to 85% of their commitments from institutional investors rather than retail channels.

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

Follow us on Twitter: @gladstonea; @jodixu; @AskAkiko; @AliciaMcElhaney; @beckyyerak.