Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, March 9. In today's briefing, an Apollo executive made some candid comments about credit concerns in direct lending.

We hope you enjoyed the weekend. Now, on to today's news...

What a top Apollo executive said about private credit in private.  Apollo Global Management’s John Zito, co-president of the firm’s asset-management unit, called out “arrogance” in private markets and predicted a private loan made to a generic “Joe Software Co.” might recover 20 to 40 cents on the dollar, according to audio recordings of his recent remarks.

Zito also talked about the selloff in shares of large software companies, which was largely sparked by fears about artificial intelligence. He cautioned that smaller software companies bought by private equity, many with private-credit loans, will face even more challenging conditions.

• What Private-Credit Investors Need to Know About the Industry’s Turmoil

Mamdani’s rental plan risks extinction for small landlords. New York City’s mom-and-pop landlords, once a fixture of the city’s housing landscape, are staring into the abyss.

Recent laws limiting rent increases paired with higher mortgage rates and other rising costs mean that many properties owned by small landlords are barely afloat, if not already underwater. The main reason they haven’t been foreclosed on is because the banks don’t want the distressed properties on their books, landlords said.

Now, Mayor Zohran Mamdani’s housing proposals—to freeze rents and increase property taxes by 9.5% for all of the city’s real estate—risk pushing them toward extinction. He is also promising a crackdown on landlords who aren’t properly maintaining their buildings.

Selecta's majority creditors defend cooperation pact. Selecta Group and its major creditors fought back against an antitrust complaint alleging they coordinated to steer a restructuring that delivered them nearly all the company’s value.

Selecta investors including Invesco, Strategic Value Partners and Diameter Capital Partners asked a New York federal court to dismiss a minority group’s lawsuit against them, the first such inter-creditor antitrust complaint of its kind. The October lawsuit accused the majority group of anticompetitive conduct in negotiating a balance-sheet restructuring that was effectuated through a Dutch court.

The defendants on Friday said their deal with Selecta was the product of an established majoritarian system baked into the debt documents allowing their group to shape the response to a default. They said investors who didn’t want to be bound by a majority vote could have invested elsewhere.

The indebted telecom Optimum Communications has advanced similar antitrust claims around its creditors’ use of a cooperation agreement to coordinate among themselves in negotiations with the company. —Andrew Scurria

First Brands gets court nod on Walbro sale. First Brands Group has received official approval to sell its engine management and fuel systems business, Walbro, to original equipment manufacturer Active Dynamics Group.

Active Dynamics will pay $50 million for Walbro’s North American business. Bankruptcy Judge Christopher Lopez in Houston approved the sale, announced earlier this week, on Friday. First Brands is continuing to negotiate with other potential buyers to sell the three remaining business lines it is operating through bankruptcy. –Alicia McElhaney

Chester, Pa. seeks control of water assets again. The bankrupt Pennsylvania city of Chester and its receiver filed new legal action to assert control over the Chester Water Authority after a major court loss earlier this year.

The latest lawsuit is part of Chester Receiver Vijay Kapoor’s ongoing effort to monetize the water system. The receiver challenged a 2012 law that restructured the board of the CWA to equally represent the city and the two counties in CWA’s service area.

In January, the city lost another court battle over its authority to sell the same water assets, clouding its path out of chapter 9. Noël Brandon, chairperson of CWA, said the receiver should respect the recent court ruling rather than launching a new lawsuit, which names the CWA and the counties of Chester and Delaware as defendants.

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