%1

A New Jersey appeals court on Tuesday threw out a $223.8 million verdict against Johnson & Johnson that a jury had awarded to four plaintiffs who claimed they developed cancer from being exposed to asbestos in the company's talc powder products, Reuters reported. The Superior Court of New Jersey, Appellate Division found that a lower court judge should not have allowed some of the scientific expert testimony the plaintiffs presented to jurors at trial. J&J Worldwide Vice President of Litigation Erik Haas said in a statement that the decision "resoundingly rejects ... the 'junk science' advanced by purported 'experts' paid by the mass tort asbestos bar." The company again said that its talc products are safe and do not contain asbestos. The jury in the case had ordered the company to pay $37.2 million in compensatory damages and $750 million in punitive damages, though that amount was automatically reduced to $186.5 million under state law. In reversing the verdict and ordering a new trial, a three-judge panel of the appeals court found that the trial court failed to fulfill its "gatekeeping role" of assessing whether the plaintiffs' experts based their testimony on sound science. In their opinion, the judges found that three experts had not explained the facts or methods they used to support their opinions that the plaintiffs got cancer from being exposed to asbestos in talc products.

As Sam Bankman-Fried goes on trial for the crypto world’s biggest alleged fraud, liquidity in the digital asset market is still only half of what it was before his FTX trading platform collapsed almost a year ago, Bloomberg News reported. The sudden drop in liquidity was dubbed the “Alameda Gap” in November by blockchain-data firm Kaiko. Alameda Research was the trading arm of Bankman-Fried’s failed digital empire. The lingering effect is largely a result of the huge losses that market makers incurred after the meltdown, researchers at Kaiko wrote in a report yesterday. Many traders and market makers either kept significant funds on the exchange, had devastated crypto projects in their portfolio, or accepted FTT, the exchange’s cryptocurrency, as collateral. The FTT token acted as a trigger for FTX’s collapse, unraveling the multibillion dollar hole in the company’s balance sheet, according to the report. Market makers fulfill an especially valuable role in the liquidity-sensitive crypto space by buying and selling coins. But as they turn more conservative in times of crisis, that results in thinner liquidity where users have greater difficulty buying or selling an asset, which in turn makes the market more volatile.

Celsius Network LLC customers whose assets have been trapped on the failed crypto lender’s platform questioned the firm’s acting chief executive officer about fluctuations in the company’s native token and its plans to partially repay creditors with stock in a new Bitcoin mining business, Bloomberg News reported. Nearly a dozen customers cross-examined Celsius Interim CEO Chris Ferraro, who testified Tuesday in New York bankruptcy court in support of the company’s plan to partially repay creditors and resolve its chapter 11 case. The hearing gave customers a chance to probe Ferraro, who has guided Celsius through bankruptcy, while their assets remain in limbo. Ferraro, who took over as Celsius’ acting CEO following the resignation of Alex Mashinsky, said his primary goal is to distribute roughly $2 billion in Bitcoin and Ethereum to creditors and transfer the reformulated business to a new management team led by Arrington Capital. Customers on Tuesday also questioned Steven Kokinos, who is expected to become the new company’s CEO. The new creditor-owned firm slated to emerge from Celsius’ bankruptcy has a strong chance at succeeding because it will be staked with $450 million in crypto, carry no debt and run a robust Bitcoin mining operation, Ferraro said.

Failed crypto lender Celsius Network kicked-off a bankruptcy trial over its plan to restart as a user-owned Bitcoin miner, telling a judge it wants to repay customers whose funds have been frozen on the platform since June 2022 a portion of what they’re owed by year’s end, Bloomberg News reported. Celsius lawyer Christopher S. Koenig said yesterday during a New York bankruptcy hearing that the new company slated to emerge from chapter 11 will be seeded with $450 million in capital and financial backing from a group of companies picked to manage the mining business, a consortium named Fahrenheit LLC that’s led by investment firm Arrington Capital. “Fahrenheit believes in the business,” Koenig said. “They are putting their money where their mouth is.” Judge Martin Glenn is considering whether to approve Celsius’s plan, which is being challenged by some customers whose funds have been locked on the platform. An affiliate of Lantern Ventures that says its owed about $82 million also opposes the plan, arguing Celsius’s advisers have overvalued the new business. The new venture must also be cleared by securities regulators. But if Celsius’s plan is approved, it would mark the first time a failed crypto platform would be reborn in chapter 11 after a string of insolvencies rocked the industry last year. The business could liquidate if the new company fails, an outcome that likely would result in Celsius customers getting repaid less, according to court documents.

When jurors size up FTX founder Sam Bankman-Fried for the first time, they might not know much about the world of cryptocurrencies. The prosecution and defense each could try to use that to their advantage, the Wall Street Journal reported. Jury selection gets under way today in the criminal case against Bankman-Fried, who is on trial for a series of actions that allegedly led to the abrupt meltdown of the FTX crypto exchange last year. Bankman-Fried is charged with stealing billions of dollars from customers of the FTX crypto exchange and using the money in large part to cover risky bets by its sister hedge fund, Alameda Research. The case involves some complex financial transactions, including allegations that Bankman-Fried instructed a deputy to take a big position in a digital token to manipulate its market price.

A former Pfizer minerals business that supplied talc for cosmetic products has filed for bankruptcy to deal with hundreds of personal injury lawsuits, saying that the drug giant is increasingly unwilling to cover those claims, WSJ Pro Bankruptcy reported. Barretts Minerals becomes the latest business to file for chapter 11 with a goal of resolving talc liabilities, a group that has also included Johnson & Johnson’s LTL Management, Imerys Talc America, Cyprus Mines and Whittaker Clark & Daniels. As awareness of talc litigation grows, the number of personal injury lawsuits that Barretts faces has grown to roughly 550, from 14 before 2018, David Gordon, chief restructuring officer of Barretts, said in a sworn declaration filed yesterday in the U.S. Bankruptcy Court in Houston. Although Barretts no longer sells talc intended for use in cosmetic products, the alleged injuries are primarily due to exposure to asbestos supposedly contained in cosmetic products that used the company’s talc, Gordon said. Barretts, which is headquartered in Dillon, Mont., and has two mines there, was spun off by Pfizer in 1992, when the healthcare business wanted to divest its minerals businesses. Minerals Technologies became an independent company that included Barretts, taking over the specialty minerals businesses.

The Catholic Archdiocese of Baltimore filed for bankruptcy protection Friday, less than two days before a new state law takes effect allowing victims of child sexual abuse to sue institutions, no matter how long ago the abuse took place, the Washington Post reported. The legal action will shift to a bankruptcy court, where the process — if successful — will set a permanent end-date when alleged victims of abuse related to the church can file claims, rather than opening a permanent window as the law intended. Each diocesan bankruptcy is unique, experts say, and outcomes depend on the court, insurance arrangements and the legal setup of the diocese. Some legal analysts said the move by the country’s oldest Catholic diocese could limit damages for some survivors, while other experts say it could more equitably distribute Baltimore’s assets and offer anonymity and streamlined financial awards, which some accusers may value. It wasn’t immediately clear Friday what impact filing under chapter 11 of the bankruptcy code will mean for the archdiocese’s 153 parishes and dozens of ministries, including within the city of Baltimore. Baltimore is the 36th U.S. Catholic diocese or religious order to file for such protection since the Catholic clergy sex abuse crisis exploded into public view in the early 2000s. Baltimore will be the sixth diocese to file in 2023.

A bank recently shut down the accounts of conspiracy theorist Alex Jones’ media company, citing unauthorized transactions — a move that caused panic at the business when its balances suddenly dropped from more than $2 million to zero, according to a lawyer for the company, the Associated Press reported. The action last week by Axos Bank also exposed worry and doubt at the company, Free Speech Systems, about being able to find another bank to handle its money. Jones, a conservative provocateur whose Infowars program promotes fake theories about global conspiracies, UFOs and mind control, is seeking bankruptcy protection as he and his company owe $1.5 billion to relatives of victims of the 2012 Sandy Hook Elementary School shooting in Connecticut. The debt is the result of the families winning lawsuits against Jones for his calling the massacre that killed 26 people a hoax and his supporters threatening and harassing the victims’ families.

A year ago, Sam Bankman-Fried was a fixture on magazine covers and in the halls of Congress, a tousle-haired crypto billionaire who hobnobbed with movie stars and bankrolled political campaigns. On Tuesday, the founder of the failed FTX digital currency exchange is set to leave the jail where he has been confined for more than seven weeks and stand trial in a Manhattan courtroom on federal charges of fraud and money laundering, capping one of the largest and swiftest corporate collapses in decades, the New York Times reported. The charges against Bankman-Fried have put the rest of the crypto industry on trial with him. He has emerged as a symbol of the unrestrained hubris and shady deal-making that turned cryptocurrencies into a multitrillion-dollar industry during the pandemic. The demise of FTX in November helped burst that bubble, sending other high-profile companies into bankruptcy and provoking a government crackdown. The trial will offer a window into the Wild West-style financial engineering that fueled crypto’s growth and lured millions of inexperienced investors, many of whom lost their savings when the market crashed. Lawyers on both sides of the case are expected to lay bare the culture of scams and risk-taking that surrounded FTX and to dissect the often-misleading publicity campaigns that helped drive years of crypto hype. “It’s a fraud that was enabled and supercharged by crypto, and by crypto’s unique aspects,” said Lee Reiners, a crypto expert who teaches at Duke Law School. “It wouldn’t have been possible in any other context.” Jury selection begins on Tuesday in U.S. District Court, with the trial expected to last six weeks. Camera crews and reporters are expected to swarm the courthouse, and the author Michael Lewis has a widely anticipated book about the case coming out that same day, featuring behind-the-scenes details of Bankman-Fried’s rise and fall.

Authorities arrested disgraced crypto hedge fund co-founder Su Zhu Friday, the latest detainment of a star from the crypto industry’s last bull cycle, YahooFinance.com reported. Singaporean authorities apprehended Su Zhu, 36, Friday afternoon at the country’s Changi Airport while he was attempting to leave the country. Singaporean courts placed a “committal order” against him according to Teneo, the court-appointed joint liquidators in the bankruptcy for Zhu’s firm, Three Arrows Capital Ltd. The court order, placed on Sept. 25, came as a consequence of Zhu’s “deliberate failure” to cooperate with Teneo’s investigations. He was sentenced to four months' imprisonment. The Singaporean courts have granted a similar order for Three Arrows' other co-founder, Kyle Davies, though "his whereabouts remain unknown at this point in time," said a Teneo spokesman. Separately, the Monetary Authority of Singapore earlier this month prohibited Zhu and Davies from conducting regulated investment activity for nine years each, according to Teneo.