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Two years after Art Van Furniture went bankrupt and started closing all its stores, the bankruptcy case's trustee is now attempting to go after the family of the late Art Van Elslander for tens of millions of dollars in proceeds from the retailer's 2017 leveraged-buyout sale to a private-equity company, Detroit Free Press reported. The lawsuit, filed this month in federal bankruptcy court in Delaware, focuses on the flurry of sale-leaseback transactions that were part of the deal and involved nearly 40 Art Van Furniture stores and related properties that the retailer had owned outright. Those transactions financed 70% of the Van Elslanders' $621 million deal in March 2017 with Boston-based Thomas H. Lee Partners. The sale-leasebacks saddled Art Van Furniture with new rent expenses — on top of a debt load from the deal — that, according to the lawsuit, immediately doomed the company and would prove unsustainable. Company founder Art Van Elslander was still alive when the sale happened. He died the following year at age 87. Proceeds from the real estate transactions went to do the deal — not support the furniture company's future. The Archie A. Van Elslander Trust received more than $529 million from the sale, and entities controlled by the patriarch's children, including Gary Van Elslander and David Van Elslander, received more than $75 million, according to the lawsuit. The lawsuit seeks to recover more than $105 million in what it calls "fraudulent transfers" that included the sale-leaseback transactions, as well as $8 million in transfers to Gary Van Elslander and $2.5 million to David Van Elslander, among other transfers.

An additional 9,000 individuals claiming they were sexually abused while in the Boy Scouts of America voted in favor of a $2.7 billion compensation plan, pushing support for it to nearly 86% of all ballots cast ahead of a bankruptcy-court trial next week, the Wall Street Journal reported. The additional votes among the roughly 82,200 individuals who have filed sexual-abuse claims against the youth group increase its chances of winning approval for the settlement from Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., at a trial scheduled to begin today. The final tally released late Thursday puts the Boy Scouts over a self-imposed target of three-quarters support from abuse survivors. While bankruptcy law generally requires two thirds approval from creditors for a proposed deal, chapter 11 cases involving mass injury and tort liabilities typically have to garner greater support. The Boy Scouts have said that 75% approval from survivors would ease court approval, while anything less could make the bankruptcy plan more vulnerable to legal challenges from objectors. Read more. (Subscription required.) 

In related news, the Boy Scouts of America’s plan for resolving 82,200 claims of childhood sexual abuse is being opposed by some insurance companies that worry some victims’ claims may not be worth as much as what the youth group says they are, the Wall Street Journal reported. Several liability insurers have said the Boy Scouts’ chapter 11 plan pegs the value of abuse claims at higher levels than what victims likely would get in state-court lawsuits or private negotiations, and that those estimates could be used by victims to extract more money from them. The Boy Scouts have said in court filings that the estimates of values of claims and the process established under its plan to award payouts mimic what victims would experience in the state-court system. Read more. (Subscription required.) 

Victims of the opioid epidemic confronted the Sackler family members who own Purdue Pharma LP for the first time in bankruptcy court as the OxyContin maker nears a possible exit from chapter 11 that requires $6 billion in settlement payments from its owners, WSJ Pro Bankruptcy reported. Addressing three members of the Sackler family who served on Purdue’s board, more than two dozen people shared stories Thursday in the U.S. Bankruptcy Court in White Plains, N.Y., of the disastrous effects physician-prescribed OxyContin, an addictive opioid, had on them, their children, siblings, spouses and parents. Dede Yoder said that her son, Chris, died in 2017 of an overdose at the age of 21 after spending most of her retirement savings on addiction treatment and rehab, which mostly wasn’t covered by health insurance. Doctors first prescribed her son OxyContin when he was 14 years old following two knee surgeries, Ms. Yoder said. Dr. Richard Sackler, Theresa Sackler and David Sackler appeared in the hearing remotely and didn’t respond to victims’ statements. They and other family members consented to hearing victims’ impact statements under a proposed settlement approved on Wednesday by the judge overseeing Purdue’s chapter 11 case. The bankruptcy deal, backed by state attorneys general, would end civil litigation accusing the Sacklers of helping fuel the opioid epidemic and taking improper dividends from Purdue, allegations the family denies.

Bankruptcy Judge Robert Drain in White Plains, N.Y., approved Purdue Pharma’s $6 billion opioid settlement funded by its Sackler family owners, overruling objections from the Department of Justice and 20 states that opposed the deal, Reuters reported. Under the settlement, the Sacklers would pay between $5.5 billion and $6 billion to a trust that will be used to pay the claims of states, victims of addiction, hospitals and others who have argued that the Purdue painkiller OxyContin played a central role in the U.S. opioid epidemic. The revised settlement must still be written into a new reorganization plan before getting final approval in bankruptcy court. Members of the Sackler family have denied wrongdoing. They said last week in a statement that they “sincerely regret” that OxyContin “unexpectedly became part of an opioid crisis.” The Justice Department’s Office of the U.S. Trustee, which oversees bankruptcy administration, said that the bankruptcy court does not have authority to approve the settlement because an appeals court must first decide whether the Sacklers can receive sweeping legal immunity in exchange for the payment. The Sacklers’ payment is contingent on ending their exposure to opioid lawsuits. But a U.S. District judge ruled in December that the protections they seek fall outside the bankruptcy court’s authority. Purdue is appealing that decision in the U.S. Court of Appeals for the Second Circuit. The new agreement replaces an earlier $4.3 billion settlement, which was upended after nine attorneys general and others argued that the Sacklers should not receive such sweeping legal protections. After agreeing to the prior deal, 20 states objected to the new settlement because it includes a $277 million payment exclusively to states that negotiated the $6 billion deal. Some have said that it would unfairly reduce the percentage of funds dedicated to addressing the opioid crisis in their own states. The states still have time to negotiate, Judge Drain said, and may be forced to accept terms they do not like rather than inviting the “dog eat dog” litigation that would result if the settlement fails. Purdue said last week that the settlement would provide additional funding for opioid abatement programs, overdose rescue medicines and for victims, while putting the company on track to resolve its bankruptcy case on “an expedited schedule.” Today, victims of the opioid epidemic will address members of the Sackler family in a hearing overseen by Drain. The hearing will be conducted by Zoom due to COVID-19 restrictions and the Sacklers will not be able to respond.

A bankruptcy judge authorized Jones Day to continue representing Johnson & Johnson’s talc subsidiary in chapter 11, rejecting arguments that the law firm can’t be trusted to look out for the interests of cancer victims because it designed the strategy to limit J&J’s liability, the Wall Street Journal reported. Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., said on Tuesday that Jones Day’s past work for J&J on a transaction that sent its talc-related liabilities into chapter 11 doesn’t mean the firm has a disqualifying conflict of interest, as injury lawyers allege. Judge Kaplan said that Jones Day’s work for J&J, which ended two days before the recently-formed talc subsidiary filed chapter 11 in October, doesn’t mean the law firm will favor the interests of the parent company over its bankrupt unit, LTL Management LLC. Instead, the judge said evidence shows that LTL and J&J have a shared interest in settling the talc liability in chapter 11. That fact ensures that neither Jones Day nor LTL could give priority to a competing interest favoring J&J that could influence the bankruptcy case, Judge Kaplan said.