March 23, 2026 - Uncle Nearest, The LYCRA Company, BlockFills, FAT Brands

This episode covers key developments in four major restructuring and bankruptcy cases:

The Uncle Nearest whiskey company’s Chapter 11 cases are dismissed just two days after filing, with the court ruling that a court-appointed receiver—already in place from prior litigation—held exclusive authority to commence bankruptcy, underscoring the limits of debtor control in receivership scenarios.

The LYCRA Company files a prepackaged Chapter 11 to eliminate approximately $1.2 billion in debt, backed by broad creditor support and a $75 million DIP facility, positioning the global fiber manufacturer for a rapid restructuring that wipes out existing equity while leaving unsecured creditors unimpaired.

BlockFills parent Reliz Technology Group enters Chapter 11 with roughly $145 million in unsecured claims, following a series of crypto-related losses and litigation, while pursuing a restructuring that would transfer its platform and customer accounts into a new entity with creditor participation.

And FAT Brands seeks approval of a $76.9 million DIP financing package—including a significant debt roll-up—to fund operations and support a near-term sale process, alongside governance changes that shift control to a special committee as part of lender negotiations.

💡 From receivership conflicts and prepackaged restructurings to crypto market fallout and franchise-driven restaurant sales, this episode explores how governance disputes, capital structure resets, and volatile markets are shaping the evolving Chapter 11 landscape.

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Transcript

Outro

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Welcome to Stretto's Restructuring Report, a podcast featuring notable stories curated by professionals and powered by Stretto Intelligence. Join us each week for highlights, updates, and news impacting restructuring professionals. And dig deeper into research and analysis online using Research Suite by Stretto. Now enhanced by AI to make it easier for professionals to find, review, and understand information that matters most. Visit researchsuite.stretto.com to learn more.

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Up first, Uncle Nearest, the American whiskey company whose products are sold in all 50 states and 12 countries, saw its Chapter 11 cases dismissed just two days after filing. The bankruptcy court for the Eastern District of Tennessee ruled on March 19th that the company's chief executive officer had no authority to file the petitions because a federal receivership order had already vested exclusive control in a court-appointed receiver. The receiver had been in place since August 2025. Appointed after the company's primary lender, Farm Credit Mid-America, filed suit to recover more than $108 million in outstanding loans. The receivership order granted the receiver all powers of officers and directors, including the specific authority to commence bankruptcy proceedings. When the chief executive filed Chapter 11 petitions on March 17th and publicly announced the receivership had ended, the receiver immediately sought dismissal. The court agreed, finding the order's language left no doubt. The receiver held exclusive authority and the chief executive had none. The receiver disclosed it was approximately four months into a marketing campaign for the sale of the business as a going concern. Next, the Lycra company, the global fiber producer behind the original Spandex brand invented at DuPont in 1958, filed for prepackaged Chapter 11 protection on March 17th in Houston. The company is targeting emergence within 75 days. LyCra reported revenue of approximately $724 million in fiscal year 2025, but carried more than $1.5 billion in total debt, all maturing by March 31st of this year. The filing is backed by a restructuring support agreement with creditors holding more than two-thirds of claims in every class of prepetitioned debt, including 100% of the supersenior term loan and euro notes claims. Under the plan, supersenior term loan lenders would receive all of the new equity and holdco notes in the reorganized company. General unsecured creditors would be unimpaired, paid in the ordinary course. Current equity holders would receive nothing. To fund operations during the case, Lycra secured a $75 million debtor in possession financing facility after a marketing process that contacted 11 potential third-party lenders, produced no acceptable offers. The company employs approximately 2,000 people across eight manufacturing facilities worldwide. Moving along, Relaze Technology Group Holdings, the parent company operating under the BlockFills trade name, filed for Chapter 11 in Delaware on March 15th. The digital asset brokerage, which served institutional and high net worth customers, reports approximately $145 million in general unsecured obligations. BlockFills sustained a series of losses beginning in 2022, including roughly $8.5 million from a borrower that filed for bankruptcy in Singapore, an unsatisfied judgment against a Bitcoin ATM company, and a $12 million settlement with a financing partner over a failed equipment loan to a cryptocurrency mining company. A separate arbitration loss to Celsius Network added approximately $4.8 million in outstanding promissory notes. In February of this year, after Bitcoin dropped below $80,000, BlockFills suspended customer deposits and withdrawals, triggering lawsuits and temporary restraining orders. The company has negotiated a term sheet with its largest customers to form a new entity that would acquire the technology platform, intellectual property, and customer accounts. Customers with allowed claims would receive a share of liquid assets and interests in a liquidating trust, with the option to convert recoveries into equity in the new company. And finally, Fat Brands, the multibrand restaurant company with 18 brands and approximately 2,200 locations, filed an emergency motion on March 18th seeking court approval for a $76.9 million debtor in possession financing package. The company filed for Chapter 11 in Houston in January of this year. The financing would come from an ad hoc group of existing prepetition noteholders holding roughly 79% of outstanding notes after a marketing process that solicited proposals from 31 potential lenders yielded no third-party term sheets. For every dollar of new money drawn, $3 of existing pre-petition debt would roll up into the new facility, bringing the total to approximately $307.6 million. The DIP facility is structured to support a sale of substantially all of the company's assets, with a timeline calling for a bid deadline of April 24th, an auction on April 28th, and closing by early May. In a related development, a mediation produced a governance agreement under which the chief executive officer will take a leave of absence, family members employed by the company will be terminated, and sole management authority will vest in a special committee. That governance agreement was a precondition to the financing.

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