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The plan administrator asked the court to approve a settlement resolving Dardana Halimi’s $30 million personal-injury claim and related state-court litigation. Under the settlement motion, Safety National Casualty Corporation—not the estates—will fund the settlement payment. After payment, Halimi will dismiss the lawsuit with prejudice, release the debtors and other protected parties, and have her proofs of claim disallowed and expunged.
Safety National will also waive reimbursement, indemnification, defense-cost and related recovery rights against the debtors, wind-down debtors and plan administrator. The transaction therefore removes a potentially dilutive $30 million claim without consuming estate cash or leaving a corresponding insurer claim, improving the remaining general unsecured claim pool while avoiding further litigation expense. Responses are due August 4, 2026, with a hearing set for August 11 at 10:00 a.m. ET.
The Second Circuit affirmed the dismissal in full of 20230930-DK-Butterfly-1’s Section 16(b) disgorgement claim against HBC Investments and Hudson Bay Capital Management. The court held that the contractual blockers in Bed Bath & Beyond’s 2023 financing validly prevented Hudson Bay from beneficially owning more than 9.99% of the company’s common stock, keeping it below the 10% threshold for short-swing-profit liability. The court also rejected Butterfly’s contention that the blockers were illusory or a scheme to evade beneficial-ownership reporting rules, according to JD Supra’s legal analysis.
The decision closes an adversarial recovery effort arising from the financing that preceded Bed Bath’s Chapter 11 filing. For creditors, the immediate consequence is the loss of a potential estate recovery from Hudson Bay; more broadly, the ruling establishes Second Circuit criteria under which self-executing ownership blockers can defeat Section 16(b) claims at the pleading stage.
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