Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, September 10. In today's briefing, Pinstripes, the restaurant and entertainment chain, has filed for chapter 11 bankruptcy, with its largest lender, Silverview Credit Partners, providing financing and acting as a lead bidder. 

Pinstripes, a restaurant and entertainment chain known for combining Italian food with bowling and bocce, has filed for bankruptcy, citing high inflation and rising labor costs.

The Northbrook, Ill.-based chain enters chapter 11 with an agreement with its largest lender—Silverview Credit Partners, which holds more than $115 million in secured debt in the company—to provide financing and serve as a lead bidder in the bankruptcy sale, according to filings in the U.S. Bankruptcy Court in Delaware. The process is subject to competing offers and court approval.

Pinstripes operated 18 locations across the U.S., including in Florida, Maryland, Texas, and Connecticut. The company closed 10 of its locations ahead of filing for chapter 11 on Monday. Pinstripes says it plans to continue operating the remaining eight locations, which will preserve nearly 900 jobs.

Water Station Management, a bankrupt vending-machine business, has won approval for chapter 11 bankruptcy plan. Meanwhile, the bankruptcy judge found the business was a Ponzi scheme, funneling tens of millions of dollars from new investors to pay earlier ones.

The plan for the Everett, Wash.–based company was confirmed Monday by Judge Frederick Corbit in the U.S. Bankruptcy Court for the Eastern District of Washington.

The court’s finding that Water Station operated as a Ponzi scheme is expected to bolster victims’ claims for tax relief under the Internal Revenue Code, potentially allowing them to deduct theft-related losses.

“No legitimate profit-making business opportunity existed for the investors,” Judge Corbit said. Water Station routinely used funds raised from machine purchasers, bond issuers and lenders to make payments owed to early investors, a characteristic of a Ponzi scheme, he said.

John Bender, a K&L Gates attorney who served as special trial counsel for the unsecured creditors’ committee, told The Wall Street Journal on Tuesday that efforts to recover Water Station’s stolen funds will continue, with the goal of returning the money to investors.

Water Station and its affiliates raised funds from a wide range of sources, including individual investors who contributed less than $200,000 and a Jefferies-backed hedge fund that provided over $100 million in bond proceeds.

Last month, federal prosecutors charged two individuals in connection with what they described as a $200 million Ponzi scheme tied to the vending machines. The U.S. Attorney’s Office for the Southern District of New York accused Ryan Wear, Water Station’s former owner and operator, of securities and wire fraud, alleging he raised millions from investors by selling vending machines that, in many cases, didn’t exist, and used money from new investors to pay promised returns.

David Bertan, Wear’s lawyer in the criminal case, declined to comment Tuesday.

–-Becky Yerak

Nano Dimension removed its chief executive after just five months at the helm and said its board would begin a review of strategic alternatives.

The digital manufacturing company said it was replacing Ofir Baharav with David Stehlin, who joined the company's board in February and is chief executive of the Telecommunications Industry Association.

The company appointed Baharav in April, shortly before a Delaware court ruled against the company, forcing it to complete its acquisition of Desktop Metal, a 3D printing company Nano had agreed to acquire for up to $183 million last year.

After the acquisition closed, Nano said it would begin a review of strategic alternatives for Desktop Metal and in July, Desktop Metal filed for bankruptcy, with Nano saying it aimed to safeguard its financial position.

"I recognize that Nano Dimension has been going through a very challenging period, but we now have a strong understanding of the value we can unlock through a clear focus on fiscal responsibility and targeted growth opportunities," Stehlin said.

––Nicholas G. Miller

Rate cuts are on the way, and U.S. companies are borrowing billions of dollars.

American corporations including Merck and Ford Motor opened September with a wave of debt sales, issuing around $56.4 billion of investment-grade bonds through Thursday this past week, along with about $9.6 billion in junk bonds, according to PitchBook LCD data.

Lower-rated companies are also finding plenty of demand. Investors have been piling back into high-yield mutual funds and exchange-traded funds, helping companies with weaker balance sheets refinance debt and borrow new money. That marks a stark reversal from earlier in the year, when junk-bond markets nearly froze during April’s tariff-fueled market turmoil.

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