Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, May 23. In today's briefing, Oaktree Capital Management, top lender to Superior Industries International, is in takeover talks with the aluminum wheel maker and working with Paul Weiss for legal advice, sources told The Wall Street Journal.

And in other news, a judge dismissed apparel retailer Liberated Brands’ bankruptcy case after finding its remaining assets weren't sufficient to repay top lender JPMorgan Chase.

Please note: The WSJ Pro Bankruptcy newsletter won't be published on Monday in observance of Memorial Day. We will be back on Tuesday.

Oaktree Capital Management is in discussions with aluminum wheel maker Superior Industries International about a potential takeover of the business.

The group of lenders led by Oaktree, holders of the company’s senior secured debt, is working with Paul Weiss as its legal adviser, according to people with knowledge of the matter.

Superior Industries said in its earnings report on May 12 that the company’s term loan lenders have agreed to provide up to $70 million in additional capital contingent on Superior Industries meeting certain business milestones. It is also in advanced discussions with the lenders about a recapitalization deal that could include swapping some of the debt for equity.

Apparel retailer Liberated Brands’ bankruptcy case was dismissed after a judge ruled its remaining assets are insufficient to fully repay top-ranking lender JPMorgan Chase.

The company filed for bankruptcy in February and appeared in U.S. Bankruptcy Court in Wilmington, Del., on Thursday to seek dismissal of the case. Judge Kate Stickles approved the request, noting the remaining assets are not enough to repay what is owed to JPMorgan or other creditors.

“The economics of these cases are very unfortunate,” Stickles said. “The remaining assets are insufficient.”

JPMorgan, owed $83 million at the time of filing, also provided bankruptcy financing. Liberated’s lawyer, Matt Fagen, said the company’s asset sales fell short of expectations, leaving a $27.1 million gap for JPMorgan.

JPMorgan lawyer Stephan Hornung supported the dismissal, calling it the only “viable option.” “Unfortunately, expenses were higher and recoveries were lower” than expected, he said. “The loss that JPMorgan will suffer is substantial.”

The bankruptcy plan of Liberated, which sold brands such as Volcom, Billabong and Spyder, included closing more than 120 stores. –Becky Yerak

The struggling rooftop solar industry faces a potentially fatal blow after the House of Representatives passed a tougher version of President Trump’s expansive tax-and-spending package.

The bill sunsets rich renewable energy credits, as expected—but includes more stringent provisions and rollback dates that were seen as especially bleak for rooftop solar. Credits for rooftop solar and battery storage would end this year, while those for larger solar, storage and wind energy projects would end by 2028, instead of a slower phaseout through 2031.

“I think this is basically shutting down the industry,” said Gregg Felton, chief executive of Altus Power, which develops solar projects on rooftops, in parking lots and other spots of high power consumption. “Nobody will invest any longer in this space with this version of the law.”

The GOP-led Senate voted Thursday to take away California’s ability to set its own tailpipe emissions standards, effectively killing the country’s biggest driver of EV investment.

The vote was 51-44. The move nullifies a measure, enacted by the state in 2022 and later adopted by 11 other states, banning the sale of new gasoline-powered cars by 2035. The House already passed the same resolution. Now it heads to President Trump for his signature.

U.S. carmakers and auto dealers argued that keeping in place the waiver—which permits California to set stricter emissions rules than the federal government—could cripple the industry by forcing sales of cars the public doesn’t want in mass numbers.

Battery maker Northvolt plans to wind down and eventually cease production at its last remaining factory site in northern Sweden as it looks for a buyer, its bankruptcy trustee said.

Efforts to identify a buyer for the battery-cell production site in Skelleftea continue, but there isn't any realistic prospects for a purchaser to assume control of the facility in the near term, bankruptcy trustee Mikael Kubu said Thursday.

The group has been able to continue battery-cell production, though its bankruptcy trustee said this isn't sustainable in the long term. The company aims to end production by June 30, Kubu said.

Meanwhile, there are interested parties and potential buyers for various business operations within the group. Negotiations are taking place and a portion of the Northvolt Systems AB's business has already been sold, the trustee added.

Northvolt—founded by former Tesla executives in 2016—filed for bankruptcy in Sweden in March after it failed to secure the financial backing needed to continue operating. —Nina Kienle

Pagaya Technologies, the AI-powered consumer-lending firm, is issuing its first bond backed by loans made to online shoppers, part of a surge in financial engineering by Wall Street that is accelerating the flow of credit to U.S. consumers.

The firm, founded in 2016 by Israeli entrepreneurs, acts as a financial middleman between the bond market and consumer lenders such as U.S. Bank and the Swedish financial-technology firm Klarna.

Pagaya is set to issue $300 million of bonds Thursday that will be used to fund “buy now, pay later,” or point-of-sale, loans offered by Klarna. JPMorgan Chase and Atlas, the asset-backed finance arm of Apollo Global Management, are arranging the bond sale, a person familiar with the matter said.

• A more humanlike generation of customer-service voice bots is here, spurred by advances in artificial intelligence and a flood of cash.
• PepsiCo is pushing back its climate goals. Its sustainability chief says the world “was a very different place” when it set its targets.
• An AI-generated PR pitch succeeded in generating attention—and hostility.
• Former audit regulators, academics and investors are preparing to fight the proposed elimination of an accounting oversight board created after Enron.

The Federal Reserve’s overnight lending operations will likely grow in importance as the central bank’s balance sheet continues to shrink, a top Fed markets official said Thursday.

With the Fed allowing its bondholdings to run down, draining reserves from the banking system, the costs that institutions such as banks and hedge funds face to borrow in repo markets could be pressured upward.

As that happens, the Fed’s standing repo facility—introduced in 2021—will likely take on greater importance in capping borrowing costs, important for keeping benchmark interest rates close to the central bank’s target, Roberto Perli, manager of the System Open Market Account at the New York Fed, said at a Thursday conference in New York City.

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

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