Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Tuesday, Aug. 19. In today's briefing, Aleon Metals is restructuring the company through a chapter 11 bankruptcy filing, with a group of bondholders agreeing to provide $188 million in financing and serving as the lead bidder in a sale process to find a new owner. Also, a judge will decide the best buyer for Citgo Petroleum without first resolving a $1.7 billion bond dispute that could give 2020 noteholders a controlling stake. 

Aleon Metals, a metals recycler and processor, filed for bankruptcy to find a new owner after having struggled to stabilize the business due to operational issues and volatile commodity prices.

The Freeport, Texas-based private company, which specializes in extracting valuable metals from spent catalysts used in petroleum refining, filed its chapter 11 petition on Sunday with the U.S. Bankruptcy Court in Houston. WSJ Pro Bankruptcy previously reported the company’s retention of Morrison & Foerster as its restructuring counsel.

A group of Aleon Metals’ bondholders has agreed to provide $188 million in financing to support the company’s bankruptcy process and its normal operations in the Freeport facilities, according to its court filing. The bondholders also serve as the proposed stalking horse purchaser in the company’s sale process in bankruptcy. The sale is subject to higher bids and court approval.

• Earlier: Aleon Metals tapped restructuring lawyers from Morrison & Foerster to advise on efforts to revamp its troubled balance sheet, according to people familiar with the matter.

The judge overseeing the forced sale of Venezuela’s Citgo Petroleum will rule on the best buyer for the oil refiner without settling a bond dispute that some creditors say is key to determining its value.

Judge Leonard Stark of the U.S. District Court in Delaware said at a status conference Monday that the bond dispute wouldn't be solved before he rules on the sale of Citgo. “I think it’s likely that I'm going to have to deal with all possible permutations of what, if any, value there is to these 2020 noteholders’ rights,” said Judge Stark.

The noteholders holding some $1.7 billion in bonds matured in 2020 issued by Citgo’s ultimate parent company, Petróleos de Venezuela SA, have claims against Citgo that are being litigated in another court. The judge overseeing that case expects to rule by the end of September. If the 2020 bondholders win, they will have a 50.1% stake in Citgo to give them decision-making power over the company’s ownership.

Judge Stark said at Monday’s hearing that no matter the decision in the 2020 noteholders’ case, he expects that there will be appeals and other delays.

Citgo’s sale hearing was slated for this week, but was delayed when the special master overseeing the sale said he received an offer better than Gold Reserve’s $7.4 billion offer for the company. Judge Stark said Monday that any further offers for Citgo are due to the special master by midnight on Friday.

On Aug. 25, the special master will reveal whether a bidder has made a better offer than Gold Reserve’s. Sources familiar with the matter expect more bids to come in before the deadline.

—Alicia McElhaney

Beyond, owner of Overstock.com and Bed Bath & Beyond, said it would change its name to Bed Bath & Beyond Inc., as it attempts to bring the retailer back to physical stores two years after it filed for bankruptcy.

The company is currently rolling out smaller-format locations of Bed Bath & Beyond in partnership with Kirkland's, which is now known as The Brand House Collective. The first physical store opened in Nashville earlier this month.

The company said it will convert additional Kirkland's locations into small to midsize format Bed Bath & Beyond and locations of Buybuy Baby, another Beyond brand.

Bed Bath & Beyond filed for bankruptcy in April 2023 after years of losing shoppers to rivals and declining retail traffic, closing all of its 360 remaining stores and 120 Buybuy Baby locations. In June 2023, Overstock.com bought the company for $21.5 million.

Last year, the combined company said it would invest $25 million in Kirkland's in exchange for licensing some Kirkland's stores to bring back physical Bed Bath & Beyond stores in a smaller format.

The company will begin trading under the ticker BBBY effective Aug. 29.

—Nicholas G. Miller

A New York developer’s property empire is at risk of crumbling after his multibillion-dollar buying spree, with his ownership of a high-profile luxury hotel and condo project at stake.

The outcome could derail one of the most improbable comebacks in recent real-estate history.

Michael Shvo soon could lose the Raleigh, a $1 billion hotel and condominium project on Miami Beach, where unit sales have been slow and construction has yet to start on apartments six years after he acquired the site.

Restaurant executives sound like they’re operating on different planets these days.

In the fast-food and slightly higher-end fast-casual world, caution is the mood. Cava and Chipotle missed Wall Street forecasts and warned that customers are getting more price sensitive. McDonald’s is seeing double-digit traffic declines among its lowest-income diners, while Wendy’s also says budget-conscious customers are pulling back.

Meanwhile at sit-down casual-dining chains, the tone is more optimistic. Chili’s has become the poster child for the group, reporting a 24% jump in U.S. same-store sales last quarter compared with a year earlier. Over the past three years, shares of Chili’s owner Brinker International have returned over 300%.

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