Bread Financial Fends Off Investor Suit Over Predecessor Spinoff

Loyalty Ventures Inc. investors can’t resume their proposed securities fraud class action against Alliance Data Systems Corp., now known as Bread Financial, over the spinoff’s bankruptcy, the Sixth Circuit ruled Wednesday.

The investors didn’t adequately allege that Alliance misrepresented Loyalty’s health before shedding the customer rewards operator, Judge Chad A. Readler said for the US Court of Appeals for the Sixth Circuit. They also failed to show Alliance’s top executives had the necessary level of intent for securities fraud, Readler said.

Loyalty sold its Canadian Air Miles reward program to Bank of Montreal as part of its 2023 Chapter 11 ...