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OxyContin maker Purdue Pharma may proceed with a bankruptcy settlement that protects its Sackler family owners from lawsuits, despite a potential U.S. Supreme Court appeal in the case, a U.S. court ruled yesterday. The U.S. Court of Appeals for the Second Circuit approved Purdue's bankruptcy plan in May, ruling that the company can shield its owners from opioid lawsuits in exchange for a $6 billion contribution to the company's broader bankruptcy settlement. The New York-based court ruled that U.S. bankruptcy law allows legal protections for non-bankrupt parties, like the Sacklers, in extraordinary circumstances. Following the ruling, the U.S. Department of Justice's (DOJ) bankruptcy watchdog asked the court to pause its approval of the bankruptcy plan to allow time for a potential appeal to the U.S. Supreme Court. The DOJ argued that Purdue should not be allowed to move forward with its restructuring before the Supreme Court had a chance to weigh in on legal protections for non-bankrupt entities, an issue that has divided bankruptcy courts across the U.S. The DOJ said it intended to file a Supreme Court petition by Aug. 28. Purdue had argued that a delay was unwarranted and that there was only a slim chance that the Supreme Court would agree to hear the appeal.

Two more insurance companies have agreed to sign on to a deal that will bring sexual abuse victims’ potential payout in the Roman Catholic Diocese of Rochester’s long-running chapter 11 bankruptcy to more than $126 million, the Rochester Beacon reported. Negotiations involving the diocese, abuse survivors and insurance companies that wrote liability policies for the diocese when the decades-old abuses occurred have delayed a resolution of the case for nearly four years. The liability carriers will ultimately foot most of the final bill. In a July 21 court filing, the diocese notes agreements by the Interstate Insurance Co. to pay $50 million and First Insurance Co. to pay $750,000. The two insurers’ long-awaited capitulation moves the bankruptcy a tantalizing step closer to resolution. But one company, Continental Insurance, known as CNA, is stubbornly refusing to sign on to a settlement that the diocese and all other insurers have now agreed to, a holdout that could augur further delay in survivors’ payout.

A management firm overseeing the development of a 320-acre youth sports complex in Arizona ended up overspending and shifting some money intended for construction into its own account, according to a bankruptcy court filing, Bloomberg News reported. The former manager, Legacy Sports, was tied to Randy Miller, a former professional baseball player who was the driving force behind the complex known as Legacy Park. Miller spent more than a decade pitching his vision for the facility, and a separate non-profit entity he founded with his son, Legacy Cares, was able to raise $280 million of debt in the municipal bond market starting in 2020 to help build it. But the complex faced construction delays, labor shortages and cancellations amid the pandemic. Its opening was pushed back, and even when it did start operating in 2022, COVID spikes cut into business. In May, Legacy Cares filed for bankruptcy. In a filing last week, Legacy Cares said that Legacy Sports, a for-profit entity that is no longer managing the facility, expected to be able to raise more money for the complex, and therefore spent money on additional improvements beyond the construction budget outlined in the offering materials for the bonds. Legacy Sports also asked for bond proceeds for its own operating expenses, beyond what the firm was entitled to receive, depleting funds available for construction, the filing said.

Celsius Network reached settlements that potentially clear a path for the crypto lender to win court approval for its plan to return assets to its customers and conclude its bankruptcy, the Wall Street Journal reported. One of the settlements resolves customer claims over allegations of fraud and misrepresentation by prior Celsius management by bumping up recoveries by 5%. The agreement resolves 30,000 claims seeking $78 billion in compensation, according to court papers filed on Thursday by lawyers for Celsius. The settlements set the stage for a confirmation hearing on Celsius’s reorganization plan in October before U.S. Bankruptcy Judge Martin Glenn and for customers to start receiving disbursements of crypto and other assets by the end of the year, according to the court papers. Lawyers for Celsius had argued customers were owed no more money than what they deposited on its platform, but many users filed claims seeking damages over alleged misconduct by the company’s former management, according to the court papers.

Lawyers for FTX founder Sam Bankman-Fried rejected prosecutors' claims that his discussions with a New York Times reporter amounted to witness tampering but agreed to accept a gag order, they said in a letter to the judge in the criminal fraud case, Reuters reported. The letter, released on Sunday, came after prosecutors sought to bar Bankman-Fried and allies from making public statements that could interfere with the case. Cryptocurrency exchange FTX, once valued at $32 billion, filed for bankruptcy protection in November as it was unable to repay depositors. Bankman-Fried has pleaded not guilty to fraud. In the letter, Bankman-Fried's attorney confirmed he had spoken with and provided personal documents to the New York Times that included documents written by a former colleague, Caroline Ellison, who has cooperated with the U.S. government. "Bankman-Fried did not violate the protective order in this case, nor did he violate his bail conditions, nor did he violate any law or rule governing his conduct," Bankman-Fried's lawyer Mark Cohen said in the letter.

Sexual abuse survivors in the Diocese of Rochester’s bankruptcy case have reached a settlement with two of the diocese’s insurance companies, WHEC.com reported. The new settlement is $50.75 million. The Diocese filed for chapter 11 bankruptcy back in 2019, after 475 survivors brought suit against it. Friday’s settlement is in addition to a $75.6 million settlement from the Diocese and another insurance company. In total, survivors have won $126.35 million in settlements.

Diamond Sports Group, the struggling subsidiary of Hunt Valley, Md.-based Sinclair Broadcast Group that owns regional sports networks, has entered a legal fight with Sinclair as part of Diamond’s bankruptcy case, the Baltimore Sun reported. Diamond Sports, which is independently managed, filed a lawsuit under seal Wednesday in the U.S. Bankruptcy Court for the Southern District of Texas. Diamond, a subsidiary Sinclair created to hold the 19 sports networks it acquired from The Walt Disney Co., filed for bankruptcy reorganization in March, burdened by more than $8 billion in debt. The lawsuit accuses Sinclair of receiving about $1.5 billion as a result of alleged misconduct, including fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties.