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Fidelity Management & Research Co. and Apollo Global Management Inc. alleged that a Texas oil driller’s junior bondholders are improperly financing a legal dispute over who should control the company following its 2020 bankruptcy restructuring, WSJ Pro Bankruptcy reported. Investors are still fighting over an 80% stake in Mesquite Energy Inc. nearly two years after the company, then known as Sanchez Energy Corp., exited from chapter 11. As part of the bankruptcy plan, the business allocated a 20% equity stake to top lenders Fidelity and Apollo while placing the remaining stock in a lockbox, to be divided depending on the outcome of the separate litigation. That dispute remains unresolved in the U.S. Bankruptcy Court in Houston. However, senior lenders including Fidelity and Apollo are now alleging that junior bondholders ran afoul of Mesquite’s court-approved chapter 11 plan by arranging outside funding to cover ongoing legal costs, according to court papers filed on Tuesday. The financing agreements propose “transferring a significant portion of the unsecured creditors’ recoveries” from the bankruptcy lawsuit to four investment funds in return for help with the costs of litigation, the court filings said. That may exceed the authority granted to an appointed representative of all unsecured creditors that is advocating on their behalf in the dispute over the 80% of the company, according to a complaint the lenders filed on Wednesday.

When the Buffalo Diocese was flush with clergy in the 1970s and 1980s, it usually took years for a priest to earn an appointment as pastor of his own parish, a key vocational milestone. But that wait time decreased dramatically, in some cases to less than a year, as a growing priest shortage forced bishops to rush newly ordained clergy into pastorates. Bishop Michael W. Fisher soon will be taking a different approach with pastor appointments, the Buffalo News reported. Instead of a pastor for each of the diocese’s 160 parishes, Fisher will name just 36 pastors — one for each of the “families” of parishes designated earlier this year as part of the diocese’s “Road to Renewal” effort. The initiative aims to reinvigorate the spiritual lives of area Catholics while at the same time addressing financial constraints brought on by a clergy sex abuse scandal, the diocese’s chapter 11 bankruptcy, and a downturn in church attendance and religious adherence. Diocese leaders yesterday invited 132 active priests to apply for the 36 open pastor slots.

The largest manufacturer of opioids in the United States once cultivated a reliable stable of hundreds of doctors it could count on to write a steady stream of prescriptions for pain pills, the Washington Post reported. These doctors were among 239 medical professionals ranked by Mallinckrodt Pharmaceuticals as its top prescribers of opioids during the height of the pain pill epidemic, in 2013. That year, more than 14,000 Americans died of prescription opioid overdoses. More than a quarter of those prescribers — 65 — were later convicted of crimes related to their medical practices, had their medical licenses suspended or revoked, or paid state or federal fines after being accused of wrongdoing, according to a Washington Post analysis of previously confidential Mallinckrodt documents and emails, along with criminal and civil background checks of the doctors. Between April and September of that year, Mallinckrodt’s sales representatives contacted those 239 prescribers more than 7,000 times. The Mallinckrodt documents are part of a cache of 1.4 million records, emails, audio recordings, videotaped depositions and other materials the company turned over as part of its $1.7 billion bankruptcy settlement in 2020.

CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc. today begin a first-of-its-kind trial to determine what the pharmacy chains owe for their role in the opioid epidemic in two Ohio counties, which are seeking $878 million, Reuters reported. A federal jury decided in November that the companies helped create a public nuisance with an alleged flood of addictive pain pills that wound up on the black market, in the first trial the companies faced over the crisis. The jury did not decide how much the companies should pay to help alleviate the health crisis, which will now be determined by U.S. District Judge Dan Polster, marking the first trial to separately determine what the pharmacy chains owe after having been found liable. Ohio's Lake and Trumbull Counties want the pharmacy chains to fund a $878 million five-year plan that includes treatment for addiction and overdoses, resources for law enforcement and healthcare providers, and employment training for addicts. Walgreens, CVS and Walmart countered with an offer of a one-year program to buy back unused prescription opioid drugs in the two counties. They argue that Ohio's public nuisance law only requires them to stop the nuisance identified by the jury — an oversupply of prescription drugs — and not to address all of its negative effects. CVS, Walgreens and Walmart have denied the counties’ allegations and said they would appeal the November verdict. The companies argued that if they must do more than buy drugs back, they should not be forced to cover costs related to illegal drug use. They also said the counties have overstated the costs of their five-year plan. The U.S. opioid epidemic has caused more than 500,000 overdose deaths over two decades, according to government data. More than 3,300 opioid lawsuits have been filed nationally against drugmakers, distributors and pharmacy chains, leading to a wave of proposed settlements.

KKR & Co. Inc.’s Envision Healthcare went around some of its lenders to borrow from Centerbridge Partners LP and Angelo Gordon & Co., touching off another clash between distressed-debt investors fighting to deploy capital where opportunities are scarce, according to a WSJ Pro Bankruptcy commentary. Envision wasn’t in desperate need of cash and had until October 2023 before it would run into its next major debt hurdle, according to S&P Global Ratings. The physician-staffing business still launched a market competition to restructure roughly $7.5 billion of debt. Soon, it was talking to competing camps of distressed-debt investors, taking advantage of the intense pressure on investors to deploy capital in picked-over debt markets. Envision settled on borrowing $2.6 billion from Centerbridge, Angelo Gordon and HPS Investment Partners LLC, while handing them nearly that much in asset collateral that had previously been pledged to term lenders, people familiar with the matter said. The financing helps the company avoid a potential cash crunch, but has alienated most of its lender base. That group, including Blackstone Credit and SVPGlobal, lost access to Envision’s valuable ambulatory-service unit, AmSurg Corp., and were pushed down in the repayment order. The lenders are now weighing their legal options, saying they were blindsided by a deal that raided their collateral, according to people familiar with the matter. Blackstone and SVP declined to comment. The new loans taken out by Envision free up KKR from needing to invest more into the company, while buying it time to weather the headwinds it has faced since its 2018 buyout. The business took a hit from declining emergency room visits during the COVID-19 pandemic and from legal battles against insurer UnitedHealth Group Inc. Now Envision has $600 million less in debt after it retires $1.9 billion of a term loan at a discount. Lenders that agreed to the discounted deal include Pacific Investment Management Co., King Street Capital Management LP and Sculptor Capital Management Inc., said the people familiar with the matter. That left creditors holding the remainder of the original $5.5 billion term loan in a worse place.

Disbarred lawyer Mitchell Kossoff — who represented many multifamily landlords in New York City — was sentenced to up to 13.5 years behind bars after he pleaded guilty to bilking his clients out of more than $14.6 million, Commercial Observer reported. A judge sentenced Kossoff to between 4 and 1/2 to 13 and 1/2 years in prison on Friday morning for three counts of grand larceny and one count of scheme to defraud after he used funds stolen from his clients’ escrow accounts to fund his lifestyle expenses, according to Manhattan District Attorney Alvin Bragg. In addition to his prison sentence, Kossoff will be required to pay back the $14.6 million and surrender a condominium in Highlands, N.J.

The Walgreens pharmacy chain has reached a $683 million settlement with the state of Florida in a lawsuit accusing the company of improperly dispensing millions of painkillers that contributed to the opioid crisis, state officials said Thursday, the Associated Press reported. State Attorney General Ashley Moody said the deal was struck after four weeks of government evidence was presented at trial. Walgreens was the 12th and final defendant to settle with Florida, which will bring in more than $3 billion for the state to tackle opioid addiction and overdoses. “We now go into battle armed and ready to fight back hard against this manmade crisis,” Moody said at a news conference in Tampa. “I am glad that we have been able to end this monumental litigation and move past the courtroom.” Walgreens, based in Deerfield, Ill., said in a statement that the company did not admit wrongdoing in the deal, during which $620 million will be paid to the state over 18 years and a one-time sum of $63 million for attorney fees. Walgreens operates more than 9,000 stores in all 50 states, according to the company website. About 820 of those locations are in Florida.

The World Class-controlled company that owns the Offices at Braker filed for chapter 11 protection on May 2, just days after a subsidiary of Karlin Real Estate scooped up the senior mortgage loan tied to the properties, the Austin Business Journal reported. The properties, owned by Nate Paul's World Class Holdings through an entity called WC Braker Portfolio LLC, are part of the sprawling North Austin office park near the intersection of Metric Boulevard and West Braker Lane in North Austin. Karlin's involvement adds an additional layer of intrigue, as the Los Angeles-based development firm has feuded in the past with World Class and is increasingly invested in the Texas capital. The WC Braker portfolio consists of nearly 45 acres valued for tax purposes at roughly $163 million, according to Travis Central Appraisal District records. It includes 13 single-story office buildings comprising 546,823 rentable square feet, according to court documents recently filed in New York. The true value of the properties could far exceed the taxable value. Legal disputes have been fought over the Braker portfolio since at least 2019. World Class is an Austin-based real estate investment firm that owns prominent development sites across the city. The embattled firm has faced a series of lawsuits, bankruptcies and foreclosures in the wake of a 2019 raid of its headquarters by federal investigators. No charges have resulted from the raid.