Restructuring

Overall, does claims trading help or hinder the chapter 11 process? Should additional disclosures be required?  

Zloop Inc., a North Carolina recycler, was having a rough 2014. It needed cash, and an investor was suing the company and Chief Executive Robert Boston for overpromising on revenue expectations.

So maybe the company shouldn’t have spent heavily on the stock-car racing career of Mr. Boston’s son, a bankruptcy-court watchdog said. In the 20 months before filing for bankruptcy, Zloop spent roughly $1.7 million for a Kyle Busch Motorsports racing-sponsorship deal that made Mr. Boston’s son, Justin, the lead driver.

Ahead of a long weekend, companies are looking for approval from bankruptcy judges next week on a variety of motions, including one signoff that would largely conclude an old dispute.

On Monday, J.P. Morgan Chase & Co. and the remnants of Lehman Brothers Holdings Inc. will ask for approval of a $1.42 billion settlement that resolves claims that J.P. Morgan illegally siphoned billions of dollars from Lehman before its collapse.