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Crypto firm SafeMoon filed for chapter 7 bankruptcy with the United States Bankruptcy Court of Utah State yesterday, the Crypto Times reported. Safemoon’s chapter 7 bankruptcy filing represents the voluntary liquidation of the company, which has an estimated asset value of $10 million to $50 million. The bankruptcy filing comes nearly a month after the U.S. SEC accused Safemoon of fraud and security law violations. On November 2, the SEC charged Safemoon executives for $200 million of project development funds, which they allegedly used for personal expenses and investments. Following the bankruptcy filing, the project’s SFM token dropped over 50% in the past 24 hours, with its market cap dropping to merely $18 million, which once peaked at $1 billion in February 2022, according to market data from Coinmarketcap.

Drugmakers and distributors pledged tens of billions of dollars to settle lawsuits accusing them of helping fuel the country’s opioid crisis. But much of the money may never be paid, WSJ Pro Bankruptcy reported. Opioid victims are finding that billions of settlement dollars have been snared in the nation’s bankruptcy system, where they face financial engineering by sophisticated investors and management teams, roadblocks from the federal government, and extensive legal wrangling and costs. The Supreme Court last week heard the Justice Department’s argument for why OxyContin maker Purdue Pharma’s roughly $8 billion settlement should be scrapped even though it has the support of nearly all opioid victims who voted on the matter. Pharmaceutical manufacturers Mallinckrodt and Endo International both completed transactions that gave priority to the interests of their financial creditors over those of opioid victims, and rewarded the companies’ top executives with bonuses or accelerated compensation before filing for chapter 11. The drug industry has committed to provide more than $50 billion to address the opioid crisis, with most of the funds coming from major pharmaceutical manufacturers like Johnson & Johnson and retailers such as CVS and Walgreens. About $10 billion would have come from Purdue Pharma, Mallinckrodt and Endo, which all filed for bankruptcy to pause mass lawsuits as they negotiated settlement agreements with state and local governments, individual victims and their family members. Those companies said chapter 11 would be the best forum to equitably distribute funds to the opioid claimants and government bodies. But the settlement deals they agreed to have been either delayed or eliminated in long and expensive court proceedings. Victims are left wondering whether payments will ever arrive, while people continue to die of overdoses and governments struggle to address the continuing epidemic.

Bankruptcy Judge Paul Warren has declined to kill a $63.5 million deal between Continental Insurance Co. and the Roman Catholic Diocese of Rochester in the diocese’s bankruptcy. Warren’s decision came after he called off a Dec. 8 hearing in which the insurer and the official committee of unsecured creditors were expected to present oral arguments, the Rochester Diocese reported. Judge Warren’s decision, handed down later the same day, leaves questions to be settled: whether either or both rival plans of reorganization presented by Continental and the diocese can be put up to a vote by creditors, and whether Continental can collect damages from the diocese for expenses the insurer says it bore after the diocese pulled out of the 2022 settlement agreement. Approval of the reorganization plan by creditors and the court is needed before payments can be made to the 485 survivors of sexual abuse at the hands of priests and other church functionaries seeking compensation from the diocese. Before calling off the Dec. 8 hearing, Judge Warren, hoping to avoid protracted litigation in the already drawn-out bankruptcy, had invited the parties to work out a global settlement. In his decision, the judge called his failed attempt to cut short the contentious proceedings “a perhaps naïve but well-intended effort.”

A federal judge took steps to end a protracted dispute between FTX and its largest creditor at a bankruptcy hearing, signaling the court could try to speed up efforts to recover FTX customer's funds from the failed crypto firm's estate. Bankruptcy Judge John Dorsey scheduled a hearing for early next year to calculate the crypto exchange's debt to the IRS, a sticking point that has stagnated efforts to remunerate the exchange's many victims. As FTX's largest creditor, the IRS' claim must be resolved before FTX victim's can recover their losses. During the bankruptcy hearing, the judge said that while FTX's bankruptcy was "a complicated case," it still needs to be resolved more quickly. "The idea here in bankruptcy, tax court bankruptcy, is we're trying to get to conclusions occlusions quickly and be as accurate as possible without wasting a lot of time and resources of the state or the other creditors," he said near the end of the hearing.

WeWork has resolved landlords' objections to its bankruptcy financing agreement, saying on Monday that it had agreed to reserve a portion of any future loans in an account that will be used for rent payments, Reuters reported. U.S. Bankruptcy Judge John Sherwood, who is overseeing the SoftBank-backed company's chapter 11 proceedings, approved the compromise during a court hearing in Newark, New Jersey. The deal allows SoftBank to redirect up to $682.5 million into new credit facilities used to backstop the shared office space provider's rent obligations. SoftBank had already posted the funds as collateral for WeWork's rent costs, but the redirected funds will give SoftBank more flexibility to extend and replace expiring credit agreements, avoiding a scenario in which landlords attempt to collect on the posted collateral. WeWork is not borrowing any new money as part of the approved financing, the company's attorney Ciara Foster said in court. But if it does bring in new money, through a future loan or asset sale, some of the future funds would be reserved to pay landlords, Foster said.

U.S. officials will take money away from victims of the fraud-tainted crypto firm, FTX Trading Ltd. unless a judge rejects the government’s demand for $24 billion in unpaid taxes, the bankrupt company said in a court filing, Bloomberg News reported. The two sides will be in court today arguing over the best procedures to determine how much of the Internal Revenue Service claim is legitimate. FTX wants to set a quick schedule to estimate the claim; the IRS has argued that its audit is ongoing, so asking a judge to estimate how much FTX might owe in taxes is inappropriate. Going forward with a court-supervised estimation process will show that FTX lost money in the three-years it operated, so it could not possibly owe IRS any substantial amount, the company said in court papers filed Sunday. And any money that it could be forced to pay would harm victims of FTX, the company said. In court papers, federal officials said they would eventually amend the $24 billion claim to reclassify at least some as lower-priority, unsecured debt. “The government is not looking for a windfall, only to determine the correct amount of the tax liabilities,” federal lawyers said in the filing. Last month, FTX founder Sam Bankman-Fried was convicted of orchestrating a massive fraud that led to the collapse of his FTX exchange. The company filed for bankruptcy last year after Bankman-Fried agreed to turn over control of his empire to restructuring professionals. Since then, the advisers have been tracking down assets and trying to untangle a complex web of debt owed to various creditors, including customers who put cash and crypto on the trading platform.

The push by creditors of Barretts Minerals to move the talc supplier’s chapter 11 case out of the U.S. Bankruptcy Court in Houston was blocked by presiding judge Marvin Isgur, according to a court filing Thursday. The official unsecured creditors committee in November filed a motion seeking to transfer the case from Texas to Montana, noting that Barretts has its headquarters in that state and conducts its primary business of talc mining there. The committee said that Barretts’s only operations in Texas are a single office suite, a processing and transportation facility in Bay City, and a couple of real-estate properties that contain fast-food restaurants. They argued that the company’s choice of filing in Texas amounts to “blatant forum shopping.” Barretts, the former Pfizer minerals business, filed for bankruptcy in October while facing hundreds of personal injury lawsuits alleging that the talc the company supplied for cosmetics products caused exposure to asbestos. In a response to the committee’s motion, Barretts’s chief restructuring officer, David Gordon, said that of the more than 550 pending talc lawsuits against the business, he isn’t aware of any in Montana. In contrast, he said he is aware of at least six lawsuits against Barretts in Texas. He said that Barretts’s decision to file its chapter 11 case in Houston was the result of “careful consideration of a number of factors, including the location of their assets, the logistics of travel for their executives and professionals, and the costs associated with filing in the Southern District of Texas compared to other jurisdictions.”

The Diocese of Sacramento will seek chapter 11 bankruptcy protection after more than 250 lawsuits claiming sexual abuse by clergy and other staff, Bishop Jaime Soto said on Saturday, CBSNews.com reported. Soto said the diocese intends to seek chapter 11 protection by March 2024. "There are many victim-survivors awaiting compensation for the reprehensible sins committed against them," Soto said in a statement to his parishioners. "The diocese faces more than 250 lawsuits alleging sexual abuse by clergy or other church staff. The reorganization process will allow me to equitably respond to the large number of those who are victim-survivors of abuse." A fund would be created to distribute to all victims, the diocese said. "Without such a process, it is likely that diocesan funds would be exhausted by the first cases to proceed to trial, leaving nothing for the many other victim-survivors still waiting for compensation," the diocese said in a statement. Soto announced in March that filing for bankruptcy was a possibility.

A lawyer who is trying to broker a settlement in Johnson & Johnson’s baby powder cancer lawsuits proposed that it can resolve the decade-long litigation and any future cases for $19 billion — $10 billion more than the company offered in two failed trips through bankruptcy court, Bloomberg News reported. James Conlan, a former law firm partner who used to defend J&J against baby powder suits, now runs a business aimed at helping corporations corral liability in mass personal injury litigation. He floated his proposal to J&J’s board in November, according to a court filing unsealed this week. But J&J rejected it and insisted a third chapter 11 filing by one of its units is the best way forward, even though courts previously ruled the world’s largest maker of health-care products wasn’t in enough financial distress to use that process. But Conlan’s proposal — backed by leaders of law firms suing J&J over claims that the talcum in its baby powder contained cancerous asbestos — is the first time plaintiffs have said publicly how much J&J should pay to resolve more than 50,000 cases that have created an overhang on the company’s stock price. Clare Boyle, a J&J spokeswoman, said in a statement that an “improper and unethical collaboration” between Conlan and a plaintiffs’ lawyer “was designed to thwart a reasonable and appropriate resolution of the talc litigation.” J&J contends its talc-based products don’t cause cancer and it has marketed its baby powder appropriately for more than 100 years. Still, the New Brunswick, New Jersey-based company has been moving since 2020 to replace talcum powder in its products with cornstarch.