New Bankruptcy Exemptions Make it Easier to File Chapter 7

QVC, the home shopping TV network that has been a staple for almost four decades, has filed for bankruptcy.The channel’s parent company, QVC Group, announced Thursday that it has voluntarily entered Chapter 11 proceedings in an effort to slash its debt from $6.6 billion to $1.3 billion. Based in West Chester, Pennsylvania, the network sells everything from kitchen appliances to a Martha Stewart clothing collection. However, it has struggled in recent years from a surge in online shopping and live-streaming apps, like TikTok and Whatnot; as well as President Donald Trump’s tariffs and the decline of viewership on cable television. CEO David Rawlinson said in a press release the “process will allow for QVC Group to have the financial structure it needs to accelerate our return to growth.” The company has sufficient money to keep operating as it navigates the bankruptcy proceedings, and expects to complete the process within 90 days. No layoffs or furloughs are planned and vendors will be paid. QVC, which stands for Quality, Value, Convenience, started in 1986, helping pioneer the live-shopping format. In 2017, QVC bought its older rival, Home Shopping Network (HSN), and merged the operations. Together, they operate nearly a dozen TV channels and a website. “A stronger balance sheet, together with revenue growth from social and streaming, is expected to enable QVC Group to stabilize and return to sustainable growth over time,” the company said. Shares of QVC Group ( QVCGA ) fell nearly 70% on Thursday. Article originally attributed from CNN.com

Why Your Mortgage and Car Payments Are “Invisible” After Bankruptcy 

i Robot, the maker of the Roomba vacuum cleaner, filed for bankruptcy protection on Sunday, saying that it would go private after being bought by Picea Robotics, its primary manufacturer. The company, which raised concerns about staying in business in March, filed for Chapter 11 protection in Delaware bankruptcy court as it grapples with increased competition from lower-priced rivals and new U.S. tariffs. iRobot generated about $682 million in total revenue in 2024, but its profits have been eroded by competition from Chinese rivals like Ecovacs Robotics. iRobot remains dominant in key markets like the U.S. and Japan, but competition forced it to lower its prices and make substantial investments in technological upgrades, according to bankruptcy court filings. New U.S. tariffs have also harmed the company, especially a 46% levy on imports from Vietnam, where iRobot manufactures vacuum cleaners for the U.S. market. The tariffs raised the company’s costs by $23 million in 2025, while making it more difficult to plan for the future, according to iRobot’s court filings. The company, which was the target of a thwarted $1.4 billion buyout by Amazon.com, has about $190 million in debt. The debt stems from a 2023 loan that iRobot used to refinance its operations, while a European competition investigation stalled the Amazon deal. After the Amazon deal fell apart and iRobot fell behind on payments to Picea, the China-based manufacturer acquired iRobot’s debt from a group of investment funds managed by the Carlyle Group, according to court documents. Under iRobot’s bankruptcy plan, Picea will take 100% of the company’s equity and cancel the $190 million remaining on the 2023 loan, as well as an additional $74 million debt that iRobot owes to Picea under the companies’ manufacturing agreement. Other creditors and suppliers will be paid in full, according to iRobot’s bankruptcy court filings. iRobot said the bankruptcy is not expected to disrupt its app functionality, customer programs, global partners, supply chain relationships or product support. The loss-making company was valued at $3.56 billion in 2021, driven by pandemic-fueled demand, but it is now worth around $140 million, according to data compiled by LSEG. iRobot was founded in 1990 by three Massachusetts Institute of Technology roboticists. It initially focused on defense and space work before debuting the Roomba robotic vacuum in 2002. The Roomba was an immediate success and it holds about 42% of the U.S. market share and 65% of the Japanese market share for robotic vacuum cleaners, according to the company. iRobot is headquartered in Bedford, Massachusetts, and it has 274 employees, according to court documents. Article credited from CNBC.com

The share of subprime borrowers at least 60 days behind on their auto loans rose to 6.65% in October, the highest level on record, according to Fitch Ratings data going back to the early 1990s. Subprime borrowing refers to lending to consumers with lower credit scores or limited credit histories, who are considered higher risk and typically charged higher interest rates to offset the increased likelihood of default. PrimaLend, which serves the "buy-here-pay-here" auto financing market — where dealers sell and directly finance vehicles for customers with poor or limited credit — filed for bankruptcy protection last month. Tricolor, which sold cars and provided auto loans mostly to low-income Hispanic communities in the Southwestern United States, also filed for bankruptcy in September. A further deterioration in credit quality could weigh on lenders, especially at a time when investors are highly sensitive to signs of stress in loan portfolios . High borrowing costs, rising living expenses and shrinking savings are squeezing household budgets, leaving subprime borrowers increasingly vulnerable. Rising subprime auto delinquencies are emerging as a clear sign of mounting stress in the credit market , as many lower-income Americans struggle to keep up with payments. Subprime auto loan delinquencies, where borrowers have gone at least 60 days without making a payment, rose to 6.65% in October, up from 6.50% in September and 6.23% a year earlier, according to Fitch Ratings data. For prime borrowers, those with stronger credit histories, the rate held steady at 0.37%, unchanged from both the previous month and a year ago, indicating they remain largely shielded from the financial strain affecting lower-income consumers.

U.S. auto parts maker First Brands filed for bankruptcy protection on Monday after disclosing liabilities exceeding $10 billion, marking the collapse of a company whose rapidly deteriorating finances have shocked debt investors in recent weeks. First Brands is expected to soon disclose an issue with its factoring arrangements amounting to nearly $2 billion, according to people familiar with the matter. The company's board and creditors are investigating the issue, one of these people said, confirming an earlier report in the Wall Street Journal. Factoring is a financing method that is tied to the future revenue of a company. The company, whose fortunes unraveled in recent weeks as it grappled with a debt pile from a flurry of acquisitions over the past few years, has obtained $1.1 billion in debtor-in-possession financing from its first-lien lenders to support ongoing operations, it said in a statement. Financial troubles at the auto parts supplier, coupled with the recent bankruptcy of subprime auto lender Tricolor Holdings, have rattled debt investors and stoked fears of broader stress in corporate debt markets, according to bankruptcy experts . The high-profile collapse of First Brands has raised questions among investors about potential ripple effects across the automotive parts industry, although experts said automaker supply chains are not likely to be affected broadly since First Brands is primarily an aftermarket parts provider. Ohio-based First Brands, which is owned by businessman Patrick James, said that its Chapter 11 cases pertain solely to U.S. operations, and expects its global operations to continue uninterrupted. In its Chapter 11 petition, First Brands estimated liabilities in the range of $10 billion to $50 billion, while its assets were estimated at between $1 billion and $10 billion. Bankers and creditors had been racing to restructure First Brands' debt as investor confidence eroded leading up to the filing, with several of its associated companies also declaring bankruptcy. Privately held First Brands, which makes replacement components including filters, brakes and lighting systems for the automotive aftermarket, emerged as a significant player in the industry through debt-financed acquisitions of rival auto parts makers. Its well-known brands include Raybestos brake solutions, TRICO wiper blades, and FRAM filtration products. Last week, ratings agency Fitch downgraded First Brands' credit rating, saying the company's options for managing its debt were increasingly limited to off-market solutions. Asset manager Apollo Global Management and investment firm Diameter Capital Partners had amassed a short position against the company's debt earlier in September. Both firms have now closed their bets against First Brands' loans. Article credit from Reuters.com

Sunnova Energy said on Sunday it had filed for Chapter 11 bankruptcy protection in the United States, as the residential solar panel installer buckled under the pressure of mounting debt and weakening demand. Shares were down 36.4% at 14 cents in premarket trading. Sunnova filed for protection in the Bankruptcy Court for the Southern District of Texas after warning in March that it might not be able to continue as a going concern. The company listed its estimated assets and liabilities in the range of $10 billion to $50 billion and has a total debt of $10.67 billion as of December 31, according to a court filing. Sunnova said last week it would lay off about 55% of its workforce, or 718 employees, in a bid to cut spending. Earlier this month, its unit, Sunnova TEP Developer, had also filed for Chapter 11 bankruptcy protection. The company’s bankruptcy filing comes at a time when the U.S. residential solar energy industry is under immense pressure from higher interest rates; a reduction in incentives in the top market, California; and fears of subsidy rollbacks for clean energy. President Donald Trump’s administration, which is pushing to maximize oil and gas production, canceled a partial loan guarantee of $2.92 billion last month that was awarded to Sunnova by the Biden administration. Last year, peer SunPower, once a pioneer of the U.S. residential solar market, also collapsed following a subpoena from the U.S. Securities and Exchange Commission about its accounting practices and the departure of its CEO.  Companies that put solar panels on U.S. homes said last month a Republican budget bill that has advanced in Congress could deal a massive blow to the industry by eliminating a generous subsidy for homeowners that had buttressed the industry’s growth.

Del Monte Foods , the 139-year-old company best known for its canned fruits and vegetables, is filing for bankruptcy protection as U.S. consumers increasingly bypass its products for healthier or cheaper options. Del Monte has secured $912.5 million in debtor-in-possession financing that will allow it to operate normally as the sale progresses. “After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods,” CEO Greg Longstreet said in a statement. Del Monte Foods, based in Walnut Creek, California, also owns the Contadina tomato brand, College Inn and Kitchen Basics broth brands and the Joyba bubble tea brand. The company has seen sales growth of Joyba and broth in fiscal 2024, but not enough to offset weaker sales of Del Monte’s signature canned products. “Consumer preferences have shifted away from preservative-laden canned food in favor of healthier alternatives,” said Sarah Foss, global head of legal and restructuring at Debtwire, a financial consultancy. Grocery inflation also caused consumers to seek out cheaper store brands. And President Donald Trump’s 50% tariff on imported steel, which went into effect in June, will also push up the prices Del Monte and others must pay for cans. Del Monte Foods, which is owned by Singapore’s Del Monte Pacific, was also hit with a lawsuit last year by a group of lenders that objected to the company’s debt restructuring plan. The case was settled in May with a loan that increased Del Monte’s interest expenses by $4 million annually, according to a company statement. Del Monte said late Thursday that the bankruptcy filing is part of a planned sale of company’s assets.

Once a formidable fast-fashion mall staple, Forever 21's parent company filed for bankruptcy protection late Sunday. It plans to "wind down" its U.S. operations unless it can find a buyer for the whole business or some of its parts. The retailer has been a shell of its former self since it first filed for bankruptcy in 2019 . It survived then as a zombie brand with fewer stores, but the chain has struggled to find life beyond the mall and to compete against fast-growing online rivals, including Shein and Temu that ship ultra-cheap goods from China. "We have been unable to find a sustainable path forward, given competition from foreign fast fashion companies ... as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends," Chief Financial Officer Brad Sell said in a statement . Sell specifically called out a tax loophole used by Shein and Temu to ship clothes and accessories straight to U.S. shoppers. That enables them to avoid paying the import duties that Forever 21 and other retailers must pay when they ship goods in bulk to warehouses first. The U.S. government is now working to close the loophole . After its 2019 bankruptcy, the chain was purchased by an unusual joint venture: Big mall operators Simon Property Group and Brookfield Property Partners teamed up with a firm called Authentic Brands Group, which buys and resuscitates dying brands such as Brooks Brothers or Nine West.  Authentic Brands' CEO later described his foray into once-fast-now-ultrafast fashion with Forever 21 as his " biggest mistake ." In 2023, Forever 21's new owners tried another maneuver, signing a partnership with Shein . But losses continued, worsened by the high inflation that had shoppers tightening their clothing budgets. Court documents show Forever 21's liabilities are now ten times bigger than its assets. The company says its stores and website will keep running while executives figure out the chain's future. Stores outside the U.S. are not part of the Chapter 11 filings.

With genetic testing company 23andMe filing for Chapter 11 bankruptcy protection and courting bidders, the DNA data of millions of users is up for sale. A Silicon Valley stalwart since 2006, 23andMe has steadily amassed a database of people’s fundamental genetic information under the promise of helping them understand their disposition to diseases and potentially connecting with relatives. But the company’s bankruptcy filing Sunday means information is set to be sold, causing massive worry among privacy experts and advocates. “Folks have absolutely no say in where their data is going to go,” said Tazin Kahn, CEO of the nonprofit Cyber Collective, which advocates for privacy rights and cybersecurity for marginalized people. “How can we be so sure that the downstream impact of whoever purchases this data will not be catastrophic?” she said. A spokesperson for 23andMe said in an emailed statement that there will be no change to how the company stores customers’ data and that it plans to follow all relevant U.S. laws. But Andrew Crawford, an attorney at the nonprofit Center for Democracy and Technology, said genetic data lawfully acquired and held by a tech company has almost no federal regulation to begin with. Not only does the United States not have a meaningful general digital privacy law, he said, but Americans’ medical data faces less legal scrutiny if it’s held by a tech company rather than by a medical professional. The Health Insurance Portability and Accountability Act (HIPAA), which regulates some ways in which health data can be shared and stored in the United States, largely applies only “when that data is held by your doctor, your insurance company, folks kind of associated with the provision of health care,” Crawford said. “HIPAA protections don’t typically attach to entities that have IOT [internet of things] devices like fitness trackers and in many cases the genetic testing companies like 23andMe,” he said. There is precedent for 23andMe’s losing control of users’ data. In 2023, a hacker gained access to the data of what the company later admitted were around 6.9 million people, almost half of its user base at the time. Article credited from NBC News