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The Diocese of Camden has announced a plan to distribute $90 million to survivors of clergy sex abuse, well above its original offer of $10 million as part of a bankruptcy action, the Cherry Hill (N.J.) Courier Post reported. But the proposal was promptly rebuffed by a lawyer for a committee representing sex-abuse survivors. The two sides have clashed repeatedly over the amount of funds to be provided to sex-abuse survivors, with the committee alleging the diocese has undervalued its assets to reduce its exposure. The proposed fund, if approved in U.S. Bankruptcy Court, would be used to resolve some 300 claims, the diocese said in a statement Wednesday night. The diocese would provide “the bulk” of the money, but its parishes “will also contribute a portion,” the statement said. It offered no specifics. It acknowledged the proposal “will cause concern in many parishioners due to its size. However, it is necessary.” “While this settlement may cause the diocese some restriction, it ultimately allows parishes, schools and ministries within the diocese to continue their important work,” the statement said. The diocese filed for chapter 11 protection from creditors in October 2020, citing the financial burden of sex-abuse lawsuits and the pandemic. It initially offered $10 million to settle sex-abuse claims, an amount that rose to $53 million by October 2021. The diocese said its new plan includes $30 million from insurers, who agreed to the payment after a 10-hour mediation session last month.

A federal bankruptcy court judge on Monday extended the deadline for the Diocese of Norwich, Conn., to file its bankruptcy plan to April 15. The deadline had been Feb. 4, The (New London, Conn.) Day reported. After the plan is filed, it will be sent to the creditors of the Roman Catholic diocese for approval by June 14. During that 60-day period, the committee that represents a large group of people, who say they were sexually assaulted by priests and employees affiliated with the diocese, will discuss the proposed plan with the diocese. All creditors of the diocese, including the victims of sexual assault, will vote whether to accept the plan. Eric Henzy, one of the attorneys who represents the creditors' committee, said yesterday that it will not be known how many victims have filed claims with the diocese until March 15, the deadline for doing so. That number could reach 100 or more. The diocese filed for chapter 11 bankruptcy in July as it faced more than 60 lawsuits filed by men who say they were sexually assaulted as boys by Christian Brothers and other staff at the diocese-run Mount Saint John Academy, a school for troubled boys, in Deep River from 1990 to 2002. Since then additional people, whose sexual assault allegations involved not only the school but diocesan churches, have filed claims in the bankruptcy case.

A federal judge on Tuesday extended a legal shield protecting the Sackler family owners of Purdue Pharma from lawsuits to Feb. 17, as they try to reach a deal with several states to settle sprawling litigation stemming from the U.S. opioid crisis, Reuters reported. Bankruptcy Judge Robert Drain said that allowing the legal shield to expire at the end of Tuesday would be “quite foolish,” given the mediator’s report of a possible deal. Purdue, maker of the highly addictive OxyContin opioid painkiller, filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and the Sacklers of fueling an American opioid epidemic through deceptive marketing. The opioid abuse crisis has led to nearly 500,000 overdose deaths over two decades, according to U.S. data. Members of the Sackler family have denied the allegations. Purdue’s bankruptcy judge has paused litigation against members of the Sackler family since 2019, seeking to buy time for the company to pursue a reorganization in bankruptcy court. On Monday, the mediator reported that the Sacklers were nearing an agreement to boost their more than $4.3 billion cash contribution to resolve the litigation after negotiating with states that objected to the original terms. Judge Drain said on Tuesday that “all bets were open” as to whether the Sacklers would continue to receive legal protection from opioid lawsuits if the current round of mediation does not result in a new deal.

Members of the Sackler family who own Purdue Pharma LP are nearing an agreement to boost their more than $4 billion offer to resolve sprawling opioid litigation after negotiating with states that had objected to terms of the OxyContin maker's bankruptcy reorganization, according to a court filing, Reuters reported. Sackler family members and states objecting to terms of Purdue's bankruptcy reorganization are "close to an agreement in principle" to contribute additional cash beyond the $4.325 billion they had pledged to settle opioid litigation, according to a mediator's interim report filed yesterday. The mediation kicked off in January among Sackler family members and several states after a U.S. district judge overturned the original settlement, which was the cornerstone of Purdue's bankruptcy reorganization plan.

Grupo Aeromexico SAB cut a last-minute deal with the main group of its unsecured creditors, easing the way for the airline to seek final approval to exit bankruptcy from a judge in New York, Bloomberg News reported. The official committee of unsecured creditors in the company’s chapter 11 case agreed to join more senior debt-holders who back the plan, including Apollo Global Management Inc. and Delta Air Lines Inc. In return, unsecured creditors will get a note for $40 million, contingent on future performance. The agreement means the only opposition the company faces to its proposal to slash $1.1 billion of debt is a smaller group of unsecured creditors led by Invictus Global Management and Corvid Peak Capital Management. That group objects to the reorganization proposal, which would hand ownership stakes to senior debt-holders Apollo and Delta. The deal was announced at the start of a court hearing in Manhattan being overseen by U.S. Bankruptcy Judge Shelley Chapman, who will hear final arguments about the proposal and then decide whether to approve the reorganization plan and allow Aeromexico to exit bankruptcy.

A group of bankruptcy law professors are looking to weigh in on Johnson & Johnson’s use of the bankruptcy system to settle lawsuits alleging that its talc products cause cancer, calling the strategy a "serious abuse," Reuters reported. The group filed court papers on Tuesday seeking approval to submit a “friend of the court” brief in support of an effort by a committee representing people who have sued over J&J's talc products to get the bankruptcy of J&J subsidiary LTL Management LLC thrown out. The seven professors argued that the pharmaceutical giant should not be permitted to use bankruptcy to rid itself of its talc-related liabilities when it’s in strong financial health. The filing comes a few weeks before U.S. Bankruptcy Judge Michael Kaplan in New Jersey is set to hear arguments over the committee’s motion to dismiss the case. LTL's bankruptcy was filed in October to resolve around 38,000 claims alleging J&J’s talc-based products caused mesothelioma and ovarian cancer. J&J, which maintains that its talc products are safe, created LTL to offload talc-related liabilities and then placed it into bankruptcy with the goal of settling those claims instead of litigating them individually in various courts. The professors, including Jared Ellias of the University of California Hastings School of Law and Kenneth Ayotte of University of California Berkeley School of Law, accused J&J of attempting to “deprive innocent talc victims of their day in court.” While this is not the first time a company has used bankruptcy to handle tort liabilities, it is an "alarming" trend, the professors said. A spokesperson for LTL said in a statement on Wednesday that courts have recognized that resolving these types of claims through Chapter 11 is legitimate use of the restructuring process. The spokesperson also stated that while LTL does not believe the claims are valid, it expects them to grow in number.

A U.S. bankruptcy court will start considering Grupo Aeromexico SAB de CV's proposed reorganization plan on Thursday, as the Mexican carrier battles junior creditors who say they are being unfairly treated in a hearing likely to stretch over several days, Reuters reported. Aeromexico, which filed for chapter 11 protection in New York in June 2020, will make its case to U.S. Bankruptcy Judge Shelley Chapman for its proposal, which would infuse new capital into the company and make Apollo Global Management, a frequent investor in distressed companies, the largest shareholder. Though the airline has lined up the support it says it needs from its multiple creditor groups, some still say the plan should not be approved unless junior creditors, some of whom may see just pennies on the dollar, receive better recoveries. Judge Chapman has set aside several days for the hearing, so will likely not rule on the plan on Thursday. If she ultimately approves the deal, Aeromexico — one of three major Latin American airlines that filed for bankruptcy during the pandemic — will be able to exit bankruptcy. The plan, according to the airline, would reduce its debt by $1 billion and save around 13,000 jobs. But junior creditors argue it is overly beneficial to existing shareholders, including Delta Air Lines In. and four board members, at their expense.

Latam Airlines Group SA “flatly rejected” Azul SA’s offer to buy the bankrupt carrier even though the sale would be a better deal for creditors, Azul contends in new court filings, Bloomberg News reported. Azul for months has been expressing interest in a tie-up with Chile’s Latam, but the bankrupt airline has refused to seriously engage in talks, lawyers for Brazil-based Azul said in court papers. Azul said its deal outlined in a Nov. 11 term sheet values Latam at $13 billion and would provide more for creditors than Latam’s current proposal, which is on the verge of seeking court approval. Latam has said Azul’s offer lacked critical details — like how the deal would be executed, how long it would take and whether it could be approved by regulators — as well as the requisite support from creditors. Latam’s restructuring plan is backed by a key group of creditors — including SVPGlobal, Sculptor Capital Management and Sixth Street Partners — and its largest equity holders. Latam is approaching a critical juncture in its effort to exit the bankruptcy case, which began with a chapter 11 filing in May 2020 as COVID-19 lockdowns stymied international travel. On Thursday, the company will seek a bankruptcy judge’s permission to begin collecting creditor votes on its restructuring plan. Its official committee of unsecured creditors is opposing that step, alleging the plan violates U.S. bankruptcy law.

Grupo Aeromexico SAB de CV is nearing the finish line of its restructuring with a proposed plan to reduce debt by more than $1 billion, but must first overcome opposition from junior creditors who say existing shareholder Delta Air Lines, among others, is benefiting from the deal at their expense, Reuters reported. The Mexican airline, after nearly two years in bankruptcy, will make its case for the plan in a New York bankruptcy court on Jan. 27. Aeromexico, which in June 2020 filed for chapter 11 protection in the United States with $2 billion in debt, says it has secured the votes needed from its creditor classes to move forward with the deal despite lingering objections from some groups. The plan, which Aeromexico says will result in a total enterprise value of $5.4 billion and preserve 13,000 jobs, would give its largest creditor, Apollo Global Management, the largest stake here in the company. But the committee representing general unsecured creditors, some of whom could see just pennies on the dollar, says the plan unfairly benefits insiders. The committee, which includes a pilots union, Falko Regional Aircraft Limited, Nordic Aviation Capital and the trustee to a group of noteholders, argues that the deal must be held to higher standards than a typical chapter 11 settlement because insiders are involved. It said the voting results only show one class of general unsecured creditors in support of the plan because the company used a “loophole” to value certain claims lower than what the creditors say they are worth. Aeromexico, however, said creditors could have challenged that arrangement before the voting procedures were approved but failed to do so.