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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.

Bankrupt trucking company Yellow Corp received court approval on Tuesday to sell most of its shipping centers and real estate to multiple buyers for $1.88 billion, ending a bidder's long-shot effort to keep the company intact, Reuters reported. Bankruptcy Judge Craig Goldblatt approved the sale at a court hearing in Wilmington, Del., saying that the purchase price was a "tremendous outcome" for the trucking company and its creditors. The sale, which will parcel out 130 of the company's shipping centers to multiple buyers, generated enough cash to pay off the company's $1.2 billion in pre-bankruptcy debt, including $700 million owed on a U.S. Treasury Department COVID-19 pandemic relief loan approved by former President Donald Trump's administration in 2020. Yellow is still seeking buyers for its remaining owned and leased real estate, including 46 shipping terminals, as well as its fleet of trucks. Yellow chose to break up its assets rather than keeping the company intact for an outside buyer, despite pressure from U.S. Senators from both parties who argued that the company should remain intact as a way to save jobs.

WeWork Inc., the embattled coworking giant navigating a bankruptcy, is keeping a Manhattan office spot largely leased to Amazon.com Inc. through a deal that includes reduced rent and a shortened lease term, Bloomberg News reported. WeWork reached a new agreement with its landlord for its space at 1440 Broadway, according to a filing Tuesday. The firm will continue to operate 300,000 square feet (28,000 square meters) spanning 10 floors at the building. The court will still need to approve the agreement. WeWork’s bankruptcy filing in early November set off a tense process surrounding many of the coworking firm’s leases, many of which the company sought to cancel or renegotiate. So far, WeWork has canceled around 70 of those contracts and expects to request more in the coming weeks, Steven Serajeddini, an attorney with Kirkland & Ellis who represents the company, said in a bankruptcy hearing on Monday. Once the biggest private office tenant in Manhattan, the company immediately nixed dozens of leases in New York City upon filing for bankruptcy. Some landlords have objected to the company’s plans to shut down many of its locations. Although in recent weeks, several of them have withdrawn formal objections through court filings.

A Dallas investor is buying another of the office buildings up for grabs with the bankruptcy of a Houston real estate firm, the Dallas Morning News reported. Hartman SPE is selling its office and retail properties as part of a plan to refocus the real estate investment trust on self-storage properties. The unit of Houston’s Silver Star Properties REIT has been in bankruptcy since this summer following a dispute with the company founder. Hartman recently contracted to sell one of its North Dallas high-rises — a 10-story office on North Central Expressway — to retailer Costco which owns the property next door.

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.