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Multi-Color's Bankruptcy Venue Tug-of-War
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, February 27. In today's briefing, Multi-Color is awaiting a bankruptcy judge's decision on whether its chapter 11 case can proceed in New Jersey after bondholders challenged the label maker's claim that a newly funded bank account establishes venue in the state.
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The opposing lenders said they plan to appeal. Photo: Andrew Kelly/Reuters
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Multi-Color, Lenders Argue Over Venue
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Multi-Color and an opposition bondholder group will have to wait to find out whether the label maker’s bankruptcy case can proceed in New Jersey, or if it will be transferred elsewhere or dismissed.
Multi-Color said in court Thursday that its New Jersey bank account, funded with some $1 million weeks before the case, is enough to establish proper venue in the state. Multi-Color is headquartered in Atlanta, and MCC-Norwood, the entity it used to establish venue in New Jersey, is based in Ohio.
A bondholder group said MCC-Norwood held its principal assets including patents and intercompany receivables outside of New Jersey prior to the bankruptcy. Bondholders said a bank account opened weeks before the bankruptcy isn't enough to determine that the subsidiary’s principal asset should be in New Jersey.
Multi-Color’s attorney Steven Serajeddini of Kirkland & Ellis said a transfer would “irreparably” set the case back, while lender counsel Bruce Bennett of Jones Day said that it is “crystal clear” that the case shouldn't be set in New Jersey. U.S. Bankruptcy Judge Michael Kaplan in Trenton said he plans to rule in the short term on the matter.
–Alicia McElhaney
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Movie Theater Chain IPIC Files for Repeat Bankruptcy in Six Years
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IPIC Theaters, owned by the Retirement Systems of Alabama, has filed for bankruptcy in Florida due to weak recovery from the Covid-19 pandemic and competition from streaming services.
The Boca Raton, Fla.-based restaurant and movie theater chain, which has 13 locations in states that include Florida, Texas and California, had filed for chapter 11 in 2019 when Alabama's pension funds, owed more than $200 million back then, bought the assets out of bankruptcy.
IPIC Theaters said it plans to sell its assets in bankruptcy. It listed up to $50 million in assets and up to $10 million in liabilities. The company employs roughly 1,300 workers in states that also include New York, New Jersey and Maryland.
–Becky Yerak
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Stellantis and other big automakers are pumping the brakes on their electric-vehicle business. Photo: Marco Bertorello/Agence France-Presse/Getty Images
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Stellantis Targets Return to Profit After Costly EV About-Turn
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Stellantis said the relaunch of popular products such as its gas-guzzling eight-cylinder “Hemis” would power it back to profitability this year, after a retreat from electric vehicles.
The automaker on Thursday reported an annual net loss of 22.3 billion euros, equivalent to $26.34 billion, reflecting the huge charges it flagged earlier this month as it rows back major investments in EVs.
Stellantis and other major automakers are pumping the brakes on their EV business and investing in hybrids and old-school combustion engines again. Consumers have been reluctant to buy EVs because of high sticker prices, worries about range and the removal of tax credits.
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C3.ai Plummets on 26% Global Layoffs, Cut to Outlook
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Shares of C3.ai plunged after the company cut its outlook and said it had reduced its global workforce by 26%. Shares have sunk 68% in the past 12 months.
The company said it plans to explore reducing other non-employee expenses as necessary, adding that it expects to record additional charges related to those costs in future periods.
C3.ai cut its outlook for the full fiscal year, projecting revenue between $246.7 million and $250.7 million. Analysts were expecting revenue of $298.7 million, according to FactSet. Third-quarter revenue also fell $53.3 million, down from $98.8 million and below the company's own guidance of between $72 million and $80 million.
The company's loss widened to $133.4 million, or 94 cents a share, compared with a loss of $80.2 million, or 62 cents a share, a year earlier. The adjusted per-share loss was 40 cents, wider than the 30 cents a share loss expected by analysts.
–Elias Schisgall
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