Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, January 28. In today's briefing, Office Properties Income Trust is scheduled to face off with noteholders opposed to a rival group's bankruptcy loan. Elsewhere, a Texas Two-Step settlement appeared to wobble.

Office Properties Income Trust to face opponents of $125 million DIP. A Houston judge is set to consider final approval of a $125 million bankruptcy loan for Office Properties Income Trust that is being contested by a rival group of creditors.

If Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston approves the proposal, OPI’s 2029 noteholders, including Helix Partners and Redwood Capital, would provide the financing. But it faces objections from holders of OPI notes maturing in 2027, which argue that it is overpriced and unnecessary. 

OPI has been at odds with the 2027 noteholders since November, when the office REIT sued the lender group in bankruptcy court, seeking to recover a portion of the discount the creditors received as part of a debt exchange in 2024.

OPI filed for bankruptcy in October with a restructuring support agreement with the 2029 noteholders and its property manager, the RMR Group. Along with the 2027 noteholders, the official committee of unsecured creditors also objects to the financing.—Akiko Matsuda

Prison company's insiders allegedly default on settlement. Insiders and affiliates of prison healthcare provider Yescare allegedly haven't made payments under a settlement that ended the bankruptcy of former affiliate Tehum Care Services.

Parties to the $75 million settlement haven't made a total of $7.5 million in payments since September, according to court papers filed by compensation trusts established under Tehum's chapter 11 plan. If the default isn't cured by next week, private plaintiffs would regain the right to sue Yescare and its owners and affiliates in the tort system. Estate administrators would also have the right to sue for assets that allegedly left Tehum before its bankruptcy.

Tehum filed chapter 11 in 2023 in a Texas Two-Step after separating from Yescare and carrying the bulk of its legal liabilities into bankruptcy court for resolution. —Andrew Scurria

FAT Brands files free-fall bankruptcy. The owner of restaurant concepts including Fatburger and Johnny Rockets filed for bankruptcy amid creditor litigation and a ballooning pile of debt.

Beverly Hills, Calif.-based FAT Brands filed alongside Twin Hospitality Group, the Dallas-based operator of Twin Peaks and Smokey Bones, in which it has a roughly 95% stake. The two companies filed for bankruptcy in the Southern District of Texas late Monday with no financing lined up to continue operations long term.

China Vanke avoids immediate default. The Chinese developer received approval from bondholders to push back repayment on debt and obtained a fresh loan from a state-owned shareholder, giving it more breathing room as the developer wrestles with a prolonged liquidity crunch. 

The company said in a statement dated Tuesday that it has received a loan of up to 2.36 billion yuan, equivalent to US$339.3 million, from Shenzhen Metro Group, its largest shareholder with a 27.18% stake. The loan will be used to repay China Vanke's bond principal and interest, it said.

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

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