Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, June 25. In today's briefing, CareerBuilder and Monster filed for bankruptcy with plans to sell off core business units to separate buyers as part of a broader restructuring. And Massachusetts is appealing a bankruptcy judge’s decision allowing Steward Health Care to proceed with a lender-backed settlement, warning it could irreversibly harm other creditors.

CareerBuilder + Monster filed for bankruptcy Tuesday with plans to sell various business lines to different buyers.

The Apollo Global Management-backed company, once one of the leading job search platforms, said it has reached a deal to sell its job board business to JobGet. Monster media properties, which include Fastweb.com and Military.com, would be sold to Valnet. And Monster Government Services, which provides software to state and local governments, would be sold to Valsoft.

CareerBuilder is actively cutting costs across its U.S. businesses and evaluating strategic options for certain international divisions, the company said.

Massachusetts has appealed a bankruptcy judge’s decision allowing Steward Health Care System to proceed with a settlement with its top lenders.

On Monday, Judge Christopher Lopez denied the state’s request for a stay of his earlier ruling, allowing the settlement to take effect while Massachusetts appeals the decision in a higher court.

But Massachusetts and other creditors in the hospital system’s bankruptcy case are opposing Steward’s settlement, which would allow the company to take on a $127 million loan to pursue litigation against insiders, insurers and others, possibly including the state itself.

If the settlement, approved earlier this month by Judge Lopez, is allowed to go forward immediately, it wouldn’t be reversible even if his ruling were ultimately struck down, Massachusetts argued in an emergency motion filed with the district court on Monday.

The judge countered that if the settlement were put on hold, Steward's chapter 11 case might have to convert to a chapter 7, with unsecured creditors likely receiving nothing.

The settlement acts as a reorganization plan that allows for a transfer of all of the company’s remaining assets to a litigation trust, which is obligated to pay out the bulk of its recoveries to the lenders, leaving little or nothing for top-ranking creditors who provided goods, services and funds to Steward hospitals during the bankruptcy.

—Soma Biswas

A tax on foreign investors in the Trump administration’s proposed tax bill is already causing European and Asian investors to rethink their investments in U.S. private capital funds.

Some European investors have delayed signing subscription documents, the legal agreements that cement their commitments to these investment pools, as they consider “whether to take the squeeze” of the added tax burden should Section 899 of the bill be signed into law in its current form, said Richard von Gusovius, global co-head of distribution at Campbell Lutyens, a fundraising and secondary adviser operating in Europe, North America and Asia.

Nearly two million student-loan borrowers are at risk of having their wages garnished this summer.

Roughly six million federal student-loan borrowers are 90 days or more past due after a pandemic-era reprieve ended, according to TransUnion. The credit-reporting company estimates that about a third of them, or nearly two million borrowers, could move into default in July and start having their pay docked by the government. That’s up from the 1.2 million that TransUnion had estimated in early May.

An additional one million borrowers are on track to default by August, followed by another two million in September. Borrowers fall into default when they are 270 days past due.

A bankruptcy judge on Tuesday conditionally approved the chapter 11 exit plan framework for the U.S. arm of spirits maker Stoli Group, despite opposition from the Justice Department’s bankruptcy watchdog.

Unsecured creditors, including the Los Angeles Dodgers, initially opposed the plan, arguing legal releases were granted to Stoli’s affiliates including S.P.I. Limited and its billionaire owner, Yuri Shefler, without repayment assurances. They later supported the plan after Stoli agreed to a settlement paying them in full over 18 months with interest. The framework, known as the disclosure statement, will be sent out to creditors for a vote.

The U.S. Trustee objected to the disclosure statement, arguing that it would be confusing to most voters because they would have to vote against the plan and check an “opt out” box to preserve lawsuit rights. Judge Scott Everett with the U.S. Bankruptcy Court in Dallas overrode the objection after the company agreed to modify the language.

Luxembourg-headquartered Stoli, which produces the eponymous vodka brand formerly known as Stolichnaya, sought chapter 11 protection in November, citing a cyberattack that caused severe operational disruption.

—Akiko Matsuda

Federal Reserve Chair Jerome Powell told lawmakers on Tuesday that recent economic data would have likely justified continuing to lower interest rates if not for concerns that higher tariffs might derail the central bank’s yearslong fight to defeat inflation.

Powell said little to tee up a rate cut next month without explicitly ruling one out. But his answers to lawmaker queries suggested it was more likely officials would wait until at least their September meeting to see if tariff-driven price increases are milder than expected before resuming rate cuts.

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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