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Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J.,threw out the second chapter 11 case that Johnson & Johnson filed to resolve its mass talc liabilities, again shutting down the healthcare-product company’s plan to achieve an $8.9 billion settlement, WSJ Pro Bankruptcy reported. Judge Kaplan said that J&J affiliate LTL Management LLC, created to carry the company’s talc-related liabilities into bankruptcy, wasn’t in sufficient financial distress to warrant granting it the legal protections of chapter 11. Friday’s ruling sets back J&J’s efforts to use the bankruptcy case to drive a settlement of mass claims alleging that its talcum-based baby powder caused cancer and contained asbestos, which the company denies. J&J said that it disagreed with the decision and would appeal. Outside of bankruptcy, J&J faces a tough road to resolving the talc litigation because of the large number of claims and the expectation that more talc users will sue for compensation in the future. In his ruling, Judge Kaplan cited a recent appeals court decision that threw out a prior bankruptcy case filed by LTL in 2021 to try to drive a settlement. A federal appeals court dismissed that chapter 11 case in January, but LTL filed for bankruptcy again in April, this time with a settlement offer supported by some plaintiffs’ law firms. That offer, valued at $8.9 billion, would rank among the largest tort settlements ever if accepted.

Bankrupt crypto companies FTX Trading Ltd. and Genesis Global Holdco LLC reached an in-principle agreement on resolving a dispute involving their chapter 11 cases, Bloomberg News reported. Collapsed exchange FTX had argued that it was owed as much as $3.9 billion by crypto lender Genesis, a contention that Genesis rejected. The sum was later reduced to up to $2 billion. Their legal representatives said in a Thursday letter to a bankruptcy judge that the two parties’ claims against each other would be settled by the agreement. They plan to file motions to bankruptcy courts for approval of the deal. The letter didn’t provide details about the settlement. The settlement would likely be a relief for many Genesis creditors, who expected the disagreement to delay bankruptcy proceedings and the eventual payout of claims.

A Florida doctor accused of taking kickbacks from Insys Therapeutics to prescribe its fentanyl spray should face a civil trial despite his recent bankruptcy, federal prosecutors are arguing, even as a judge delayed it from going forward, Reuters reported. In a filing Wednesday in Tampa federal court, lawyers for the Middle District of Florida U.S. Attorney's Office said their civil lawsuit against Edward Lubin stems from the government's "police or regulatory power," and so was not automatically paused like most legal claims against a newly bankrupt debtor. They noted that federal appeals courts in other cases have ruled that lawsuits brought by the government under the federal False Claims Act, like the one against Lubin, are examples of police or regulatory power. Lubin had notified the court of his chapter 11 bankruptcy earlier on Wednesday, saying it should halt the case. His lawyer did not immediately respond to a request for comment. U.S. District Judge Thomas Barber, who is presiding over the case, said in an order on Thursday that he would wait for the bankruptcy court to decide whether the trial can go forward. For now, he put the Aug. 2 trial date on hold.

Lordstown Motors’ efforts to sell itself during its bankruptcy have been delayed as a judge ruled that the electric-vehicle maker must first face a $900 million lawsuit alleging it stole trade secrets, WSJ Pro Bankruptcy reported. Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del., is allowing the lawsuit to move forward in California. The plaintiff, Karma Automotive, which filed the lawsuit before the EV maker filed for bankruptcy in June, had argued that Lordstown might try to sell the intellectual property allegedly stolen from them. “It makes good sense to let the Karma case proceed in California before I decide the title issues that might be implicated by a sale process,” Judge Walrath said. “I agree with Karma that the debtor can’t sell something that the debtor cannot establish is the debtor’s property,” Judge Walrath said. “The appropriate thing is for the California court that has devoted three years to conducting discovery and addressing pretrial motions and is fully familiar with these facts should decide those issues.” “We should have a verdict sometime in September,” which isn’t far off from any Lordstown sale process, she said. Lordstown yesterday asked the judge to approve its bid procedures as well as to deny a request by Karma to allow it to continue with its 2020 lawsuit, saying that time is of the essence given the company’s cash burn and financial state.

The Roman Catholic Diocese of Syracuse and the Official Committee of Unsecured Creditors announced Thursday that they have reached a settlement agreement in the chapter 11 case filed in U.S. Bankruptcy Court in the Northern District of New York on June 19, 2020, CNYCentral.com reported. In 2020, there were more than 100 lawsuits filed against the diocese through the Child Victims Act, which allows victims to file civil lawsuits against abusers even if the statute of limitations has passed. The financial impact of the Child Victims Act and the economic downturn of the COVID-19 pandemic led to bankruptcy filing. The Diocese and the Committee believe that this settlement is an important first step in forming a plan that will lead to the Diocese's exit from bankruptcy. The settlement will provide payment in the amount of $100 million to all survivors of sexual abuse for acts perpetrated against them by clergy, religious, lay employees, and volunteers. Although the settlement amount remains subject to a creditor vote and court approval, the dollar figure of the settlement has been accepted by the Official Committee — comprised entirely of individuals who themselves survived sexual abuse when they were children by clergy members and employees within the Diocese of Syracuse.

Bill Hwang, the founder of Archegos Capital Management, on Thursday asked a judge to let him subpoena documents from 10 banks, in an effort to shift blame as he defends against criminal fraud charges that the firm's collapse was his fault, Reuters reported. In a filing in Manhattan federal court, Hwang said the documents will show that Archegos' counterparties "played a pivotal role" in the March 2021 collapse of his once-$36 billion firm, and that his swaps trades were legal. Hwang's request came three days after UBS agreed to pay $388 million in fines to U.S. and British regulators over poor risk management at Credit Suisse, which lost $5.5 billion when Archegos met its demise. UBS bought Credit Suisse last month, under pressure from Swiss regulators. Other banks also lost money when Archegos collapsed, but less than Credit Suisse.

FTX founder Sam Bankman-Fried will no longer face a campaign finance charge at an October criminal trial, federal prosecutors say, citing a decision by Bahamian authorities to reject a count in the indictment that was not listed on the warrant against him when he was extradited to the U.S. in December, the Associated Press reported. Prosecutors told U.S. District Judge Lewis A. Kaplan in a letter that the government in the Bahamas notified it on Wednesday that authorities there did not consider the charge to be included in Bankman-Fried's extradition. Thus, prosecutors wrote, they would not pursue it at the trial, in keeping with U.S. treaty obligations to the Bahamas. Bankman-Fried, 31, has been confined to his parent's Palo Alto, Calif., home as part of a $250 million bail package that prosecutors on Wednesday asked a judge to revoke. Prosecutors say his extensive contact with the news media demonstrates an effort to affect the jury pool. His lawyers deny it. The judge has imposed a gag rule while he decides the issue.

The former operator of Delmonico’s in New York, yesteryear scene of Wall Street deals brokered over wedge salads and buttery steaks, has filed bankruptcy amid an ownership fight with its landlord over the storied restaurant’s name, Bloomberg News reported. Ocinomled Ltd., which began operating Delmonico’s in the late 1990s, filed for chapter 11 protection on Monday and listed $950,000 in unpaid rent allegedly owed to an affiliate of real estate investment firm Time Equities Inc. The affiliate, Beaver Equities Group LP, owns the historic building in Manhattan’s Financial District that houses the restaurant, which is temporarily closed. The bankruptcy follows years of litigation between Ocinomled’s former partners and Beaver, which argues it acquired the Delmonico’s mark around the time it purchased the building bearing the restaurant’s name. Ocinomled’s owners contend they own the Delmonico’s name and common law mark in New York along with the goodwill associated with it. In any event, the Time Equities affiliate and restaurateurs who say they’re working to reopen Delmonico’s argue Ocinomled’s lease expired at the end of 2022 and that new operators now have a 15-year deal to run the establishment. Lawyer Rodney Austin, who represents the new operators — called DRG Hospitality Group — said Ocinomled’s bankruptcy will have no impact on plans to revive Delmonico’s, which closed during the COVID-19 pandemic. His clients are working toward a September re-opening, he said.

The former operator of Delmonico’s in New York, yesteryear scene of Wall Street deals brokered over wedge salads and buttery steaks, has filed bankruptcy amid an ownership fight with its landlord over the storied restaurant’s name, Bloomberg News reported. Ocinomled Ltd., which began operating Delmonico’s in the late 1990s, filed for chapter 11 protection on Monday and listed $950,000 in unpaid rent allegedly owed to an affiliate of real estate investment firm Time Equities Inc. The affiliate, Beaver Equities Group LP, owns the historic building in Manhattan’s Financial District that houses the restaurant, which is temporarily closed. The bankruptcy follows years of litigation between Ocinomled’s former partners and Beaver, which argues it acquired the Delmonico’s mark around the time it purchased the building bearing the restaurant’s name. Ocinomled’s owners contend they own the Delmonico’s name and common law mark in New York along with the goodwill associated with it. In any event, the Time Equities affiliate and restaurateurs who say they’re working to reopen Delmonico’s argue Ocinomled’s lease expired at the end of 2022 and that new operators now have a 15-year deal to run the establishment. Lawyer Rodney Austin, who represents the new operators — called DRG Hospitality Group — said Ocinomled’s bankruptcy will have no impact on plans to revive Delmonico’s, which closed during the COVID-19 pandemic. His clients are working toward a September re-opening, he said.