Private investment firm 777 Partners and 22 affiliates entered Chapter 11 this week with at least USD 2.7bn in debt. Federal prosecutors accused co-founder Joshua Wander in 2025 of engaging in a USD 500m fraudulent scheme, to which he pleaded not guilty. The Chapter 11 filing also follows the filing of an involuntary Chapter 7 petition against the firm last month.

Soon after the Chapter 11 filing, Leadenhall Capital Partners, the administrative agent on the debtors’ prepetition loan and security agreement, opposed the debtors’ DIP financing motion, arguing that 777 Partners filed its Chapter 11 cases as a counter to the involuntary Chapter 7 petition pending in Florida. Before the bankruptcy filing, Leadenhall commenced a state court action against 777 Partners, accusing the firm of inducing lenders into a USD 350m credit facility based on nonexistent, unowned, or double-pledged collateral. That action has been stayed as a result of the Chapter 11 filing. Leadenhall accused the debtors of seeking DIP financing that would further their prepetition schemes and enable them to continue a “longstanding Ponzi scheme to defraud Leadenhall and other creditors.”

The debtors moved to transfer the Chapter 7 case to the US Bankruptcy Court for the Northern District of Texas, where the Chapter 11 petitions were filed. The petitioning creditors that filed the involuntary Chapter 7 petition, on the other hand, argued that for 777’s entire existence until the Chapter 11 filing, it was based in Miami, founded by Miami residents, and operated out of Miami offices. The judge overseeing the Chapter 11 cases ultimately concluded the first day hearing without approving the USD 14.87m DIP facility that the company’s existing lenders had agreed to provide, opening the floor to competing offers. By the end of the week, the debtors informed the bankruptcy court at a status conference that they have a potential new DIP financing option. The US Trustee’s attorney questioned when the new DIP terms would be filed on the docket if that proposal is chosen as the offer the debtors will move forward with. Counsel to the debtors replied that the debtors intend to file that information by the afternoon of 18 August. To facilitate continued discussions, the current proposed DIP lenders agreed to waive a DIP milestone that required entry of an interim DIP financing order by this week.

In other disputes, DISH DBS Corporation‘s unsecured creditors committee (UCC) moved for standing to bring claims against certain DISH entities and parent company EchoStar over the company’s Boost Mobile transfer. According to the UCC, Dish Wireless (DWLLC) transferred Boost Mobile – a billion dollar business – to non-debtor insider affiliates for “grossly inadequate” consideration. The UCC has requested permission to bring preference and fraudulent transfer claims to avoid the transfer and recover the value of the transferred entity. The UCC argued that DWLLC has unjustifiably refused to bring the action. The UCC is mostly comprised of creditors holding tower lessor claims against DWLLC, and the debtors argue that the tower lessors’ claims are capped under the Bankruptcy Code and lack merit for a number of reasons, including force majeure provisions in the agreements.

Elsewhere in the case, DISH reached a deal with various tower lessor claimants regarding the valuation of their contested claims for voting purposes, and the debtors filed an amended plan and disclosure statement to, among other things, account for the recent closing of a sale of spectrum assets to AT&T and the subsequent repayment of the network provider’s 5.25% senior secured notes due 1 December and 7.25% senior notes that matured on 1 July, plus interest and fees, from the sale proceeds. As a result of the payment, the senior notes class has been removed from the amended plan.

The amended plan and disclosure statement also contained revisions to address a 30 July Federal Communications Commission (FCC) order that prohibits holders of an intercompany claim from recovering from a USD 2.4bn FCC trust established for the benefit of tower lessors.

In other Chapter 11 plan news, boating retailer West Marine obtained confirmation of its plan that will eliminate approximately USD 251.2m of funded debt and provide new liquidity through an exit financing facility starting at USD 7.5m, with the potential for additional funding later on. At the confirmation hearing, Judge Karen Owens of the US Bankruptcy Court for the District of Delaware stated that, for the first time in her career as a judge, people were approaching her in public commenting on how upset they were that the company’s stores were closing. She told the debtors: “You have a very loyal customer base.”

Bitcoin Depot also obtained plan confirmation this week. The cryptocurrency ATM’s liquidating plan follows a Chapter 11 sale process that resulted in 10 sales to nine buyers and brought in approximately USD 1.8m for the estates, along with the assumption of certain cure costs. The plan also creates a liquidation trust that will distribute remaining value and pursue claims that were preserved for the estates.

In sale news, Spirit Aviation selected a USD 93.25m bid from DPC HoldCo for its Dania Beach, Florida, headquarters campus after an auction this week. DPC, a Delaware entity affiliated with Hill City Capital, was named as the stalking horse bidder on 29 July with a USD 88m offer. REM Acquisition was named the back-up bidder with a USD 97m offer. Despite the higher price, Spirit said that REM’s bid would have brought in less money for the debtors’ estates after factoring in payments owed to DPC as the stalking horse bidder and other costs.

Also this week, summer camp operator SIMAD Holdings obtained bankruptcy court approval of the sale of over 20 individual camps throughout the eastern US, which will net the estate upwards of 300m.

In addition to 777 Partners, the Debtwire team profiled three other new Chapter 11 cases this week. Lourdes University, a private Franciscan university in Sylvania, Ohio, commenced a Chapter 11 case to continue winding down operations after closing the school.

Restaurant and deli operator SMF Group, known as The Fireman Group, entered Chapter 11 with less than USD 100,000 in the bank and nearly USD 20m in debt obligations. The Fireman Group currently owns and operates nine restaurants, with eight in New York City and one in Washington DC, and employs over 800 people. The debtor cited the COVID-19 pandemic, construction costs, and a fire at one of the restaurants as driving factors behind the filing.

Womble Contracting, which operates as Womble Company and provides internal and external coatings for the pipeline industry, commenced a Chapter 11 case to pursue a restructuring, sale, recapitalization, or other value-maximizing options. According to the company, starting in 2020, the “economic disruption” associated with the COVID-19 pandemic caused a substantial reduction in pipeline-project activity and the volume of pipe delivered to the debtors for coating. Exacerbating matters, tariffs and trade conditions affecting imported steel products increased uncertainty and costs in the pipeline supply chain. These developments, in turn, affected the timing and economics of projects, further hurting coating volumes. Additional factors contributing to the Chapter 11 filing included increases in labor, materials, utilities, rent, insurance, maintenance, and other operating costs.

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Next week, Debtwire subscribers can look forward to our coverage of confirmation hearings for Ascend Elements and Buckingham Senior Living Community, the hearing on Crown Castle’s objection to the DWLLC intercompany claim, and much more.

New Case

 Six Month Lookback

The following table illustrates the number of Chapter 11 cases profiled by the Debtwire team during the last six-month period. Debtwire profiles cases for debtors that have at least USD 10m in funded debt or are otherwise significant.

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