Financials Sector Chapter 11s Surge, Eclipsing 2025’s Full-Year Total in First Half

All of this week’s cases were freefalls, other than reinsurer holding company Alea Holdings US, which filed with $276.7 million in net debt to implement an RSA with its secured lender and trust preferred holders. The prevalence of freefalls is consistent with trends from the first half of 2026, during which freefalls made up 83.3% of cases with liabilities of $100 million to $1 billion, as noted in our First Day Midyear Review that came out this week.

In addition to Alea, the financials sector had two $100M+ filings this week. One was from subprime personal lender CashCall Inc. and the other was from Ria R Squared Inc., a Miami-based portfolio manager of “institutional level private investment and securities.” CashCall is exploring options in the wake of more than $400 million in adverse litigation judgments, while Ria R Squared is seeking to restructure. Trajector Holdings LLC, a disability benefits service provider, also filed to restructure.

Financials sector filings are on the rise, having already eclipsed the total of chapter 11s from this sector in all of 2025. This year stands just five cases shy of surpassing all other years on Octus First Day record.
 

Chapter 11 filings by financials sector companies with liabilities between $100 million and $500 million in particular are surging in 2026 relative to prior years. Through the year to date period, 2026 has more financials chapter 11s in this liability range than the seven previous years combined over the same Jan. 1 to July 23 stretch.
 

Looking to sell assets is Poolin Technology PTE, a crypto currency mining pool and blockchain infrastructure services company in wind-down that has secured a stalking horse. Flexible packaging producer Phoenix Converting Inc. dba Flex Pack, is also looking to run a sale process, with various parties exploring a sale including an affiliate of one of the debtors’ major shareholders that expressed interest in a going-concern bid. Magellan Aerospace, with a manufacturing facility in Middletown, Ohio, is considering options but also says it expects a marketing process for its assets will begin shortly.

The week’s filings also included Govassist LLC, a Guaynabo, Puerto Rico-based travel and immigration consulting company, Beverly Hills, Calif.-based Marmar Bedford LLC, and Jenk’s Best Living LLC, owner of a multi-family apartment community in Jenks, Okla., that filed in a dispute over ownership and alleged malfeasance.

American Efficient, a Durham, N.C.-based energy-efficiency aggregator, and three affiliates filed on July 18 in the Western District of North Carolina after the U.S. Federal Energy Regulatory Commission imposed a civil penalty of $722 million against the debtors for alleged fraud and directed them to disgorge an additional $410 million in “unjust profits.”

Chapter 15s were also filed by automotive interior supplier Grupo Antolin to implement a Spanish restructuring plan, U.S./Canadian logistics provider Lion Force Transport Inc. seeking recognition of a Canadian receivership proceeding and Curaçao-based food factory operator Lovers Industrial Corp. BV.

Poolin Technology PTE, a private Singapore-registered company providing cryptocurrency mining pool and blockchain infrastructure services filed on July 22 in New Jersey to facilitate a section 363 sale process for their assets. The debtors have lined up Thor CALAP as stalking horse bidder to purchase certain assets relating to their mining facilities – $15 million relating to the debtors’ owned facility in Pyote, Texas, and $37 million for their “land leased” facility in Pecos, Texas (referred to as the Tarbush facility).

Poolin says it once ranked among the world’s largest crypto mining pools, operating in China through the Poolin Wallet product which allowed users to borrow stablecoins against Bitcoin collateral. The business model depended on institutional lenders, primarily Tether International Limited and later Antalpha Technologies Ltd., to fund the borrowing spread. China’s May 2021 ban on Bitcoin mining forced Poolin to shutter its mainland operations, prompting a shift toward mining sites in West Texas through Poolin affiliates. However, Bitcoin’s price collapse in 2022, coupled with mounting margin calls, led Poolin Wallet to suspend withdrawals and issue roughly $163.7 million in IOUs to holders in September 2022. As of the petition date, the company has substantially completed the wind-down of its operating business at both of its mining sites.

Trajector Holdings LLC, a Saint Augustine, Fla.-based disability benefits service provider, filed on July 23 in the Middle District of Florida. Chief restructuring officer Mark Healy of Michael Moecker & Associates says an impasse between the debtors’ principals over governance issues that coincided with a looming credit facility maturity date and “considerable regulatory and legislative headwinds” affecting the debtors’ business, left the debtors unable to act decisively “at a pivotal moment” and necessitated seeking chapter 11 protections. The debtors are seeking to fund the chapter 11 cases with their secured lenders’ cash collateral. According to Healy, “escalating” disputes between CEO James Hill and chief medical officer Gina Uribe regarding the company’s governance and financial affairs generated “substantial instability” within the company and disrupted the company’s efforts to refinance its maturing senior secured credit facility.

Magellan Aerospace, operator of an aerospace manufacturing facility in Middletown, Ohio, filed for chapter 11 protection on July 22 in the Southern District of Ohio. Facing environmental obligations and “business headwinds,” the debtor says it is considering its options in chapter 11, including a plan of reorganization or a sale of substantially all assets. The debtor has no secured debt and no public debt, but has over $80 million unsecured obligations owed to Magellan Aerospace USA Inc., the debtor’s 100% equity owner. Magellan Aerospace USA Inc. has agreed to provide $20 million in DIP financing that would also roll up to $60 million of its unsecured loans.

CashCall Inc., a La Jolla, Calif.-based unsecured personal loan lender, filed on July 20 in the Southern District of California. With its lending models to subprime borrowers no longer viable and the company facing hundreds of millions of dollars in adverse judgments, the debtor no longer makes any loans and has no employees. The debtor says it is looking for “strategic and value maximizing alternatives” and is reviewing the status of various litigations or whether there are any other potential litigation claims. The debtor says it is “also considering whether liquidation is appropriate.” The case would be funded by approximately $4 million in DIP financing from related party and insider Absolutely Zero Corp., which the debtor’s sole shareholder J. Paul Reddam owns.

Phoenix Converting Inc. dba Flex Pack, a flexible packaging producer, filed on July 20 in the Northern District of Illinois to pursue a going-concern sale. An affiliate of Edgewater Flex Pack LLC, one of the debtors’ major shareholders, expressed interest in acquiring the debtors’ “Flex Pack” business as a going concern. The debtor seeks to fund the case with the use of cash collateral, but secured lender City National Bank of Florida has not consented. The company attributes the bankruptcy filing to material and labor cost increases due to inflation and interest rate increases, as well as softening demand. The debtor explains that the flexible-packaging industry experienced a prolonged period of “destocking,” as customers that had over-purchased during the Covid-19 pandemic worked down elevated inventory levels. The debtor adds that the large packaging companies that had outsourced work to the debtors increasingly brought that work back in-house.

Alea Holdings US, a Hartford, Conn.-based reinsurer holding company, filed on July 19 in the Southern District of Texas to implement a settlement of obligations with $120 million in trust preferred capital securities, or TruPS, and continue an orderly runoff of their insurance businesses. The company filed after entering into a restructuring support agreement with prepetition secured lender and proposed plan sponsor Catalina Finance and Hildene Capital Management, holder or manager of $60 million in trust preferred capital securities, or TruPS.

The RSA and plan of reorganization provide for the “consensual payback and discharge” of approximately $155 million of TruPS claims with a $20 million cash pool for holders, excluding distributions to TruPS claims held by Catalina Finance. Prepetition credit facility claims held by Catalina Finance would receive a combination of cash, replacement debt, reinstatement of existing debt and/or an equity conversion or capital contribution. General unsecured claims would be reinstated and are unimpaired under the plan.

The debtors have also negotiated agreements for the sale of their equity interests in Alea North America Insurance Co. and National American Insurance Co. of California. The terms of the sales have not been disclosed.

At Monday’s first day hearing, Judge Christopher M. Lopez approved all of Alea’s first day relief along with setting a confirmation hearing on the prearranged plan of reorganization for Sept. 10.

Sale-related events for the week’s cases are recapped below:
 

Alea Holdings US Co.
Alea is a reinsurance holding company.
Seeks approval of private sales of equity interest in two operating subsidiaries – Alea North America Insurance Co., or ANAIC, and National American Insurance Co., or NAICC, of California. Both of these are insurance businesses that no longer write policies and are in “run-off” with respect to their legacy property and casualty insurance and reinsurance business.
The ANAIC purchaser is a third-party, U.S.-based specialty insurance and reinsurance holding company and the NAICC purchaser is a third-party, U.K.-based international insurance and reinsurance group.
Poolin Technology
Poolin provided crypto currency mining pool and blockchain infrastructure services, but has substantially completed a wind-down of its operating business at both of its mining sites.
Seeks to run a sale process for substantially all assets.
Stalking horse:	Thor CALAP for two sets of assets under two separate APAs: (i) Tarbush assets: $37 million for the power rights and equipment and other assets associated with the Tarbush facility in Pecos, Texas, excluding certain specified assets and (ii) Pyote assets: $15 million for the Pyote site and associated power rights, equipment and other assets.
Sale timeline:	Aug. 12: Bid procedures hearing
	Aug. 27: Submission of non-binding indication of interest (ongoing)
	Sept. 8: Bid deadline
	Sept. 10: Auction
	Sept. 11: Notice of winning and back-up bid
	Sept. 14 at 5 p.m. ET: Sale objection deadline / assumption and assignment objection deadline
	Sept. 16: Sale hearing
	Nov. 30: Sale closing
Magellan Aerospace
Magellan Aerospace operates an aerospace manufacturing facility in Middletown, Ohio.
The debtor says it expects a marketing process for its assets will begin in the next week and it “expects to make a decision and promptly return to Court to begin executing the appropriate strategy, within the next 2-4 weeks.”
Phoenix Converting
Phoenix Converting does business as Flex Pack, a specialized flexible-packaging producer.
Eight parties have accessed a virtual data room and three remain active in exploring a sale. An affiliate of Edgewater Flex Pack LLC, one of the debtors’ major shareholders, expressed interest in acquiring the debtors’ “Flex Pack” business as a going concern, and the debtors have implemented protocols to account for this potential insider sale including appointing a special independent director.

Single asset real estate cases from the week, in lieu of an individual filing alert, are listed below:
 

CASE NAME/PETITION	COURT	ADDRESS
1230 Holding LLC	E.D.N.Y.	1230 East Tremont Ave. Bronx NY
Veranda Park Enterprise LLC	M.D. Fla.	7065 Westpointe Blvd., Unit 140, Orlando, Fla.
RYAN FAMILY PROPERTIES LLC	D.N.J.	Properties used to operate funeral homes in Ocean County, N.J.
KWR Bedford LLC	E.D.N.Y.	171 Bedford Ave., Brooklyn NY
2650 Soquel LP	N.D. Calif.	2650, 2628 and 2630 Soquel Dr., Santa Cruz, Calif.
Greene P. Inc.	E.D.N.Y.	66 Fort Greene Pl., Brooklyn, NY

Filing alerts and case summaries from this review period are recapped below, all of which can also be found on the First Day website: