%1

The Archdiocese of Santa Fe, N.M., will hold another online auction beginning Jan. 31 to sell more parcels of land for a settlement with close to 400 victims of clergy abuse, the Santa Fe New Mexican reported. No settlement has been reached since the archdiocese filed for chapter 11 bankruptcy three years ago. The archdiocese hopes to raise enough money through property sales, donations, insurance and other methods to work out a group settlement, so each victim isn’t addressed in separate lawsuits. The online auction will conclude Feb. 7. The auction’s website, www.ASFbankruptcyauction.com, will be available on Jan. 3 and will list the parcels involved. SVN Auction Services of Florida and Louisiana will oversee the auction, as it did the first one in September. That auction generated about $1.4 million for the archdiocese, said Louis Fisher III of SVN, although officials are still closing on some of the transactions. Attorney Aaron Boland of Santa Fe, who represents one of the victims, said the archdiocese’s insurance policies — and how much insurance companies will pay out — are a much bigger matter than the auctions. Fisher said the second auction would include 427 properties packaged into 80 bundles in 16 New Mexico counties. He said he hoped the archdiocese could generate $2 million to $4 million, but that it was hard to estimate.

Members of a defunct medical cost-sharing group want its administrator, Aliera Cos., forced into chapter 11 bankruptcy after winning more than $25 million in lawsuits alleging they were misled into buying sham health insurance of little value, WSJ Pro Bankruptcy reported. The involuntary bankruptcy petition filed against Aliera followed two federal court rulings last month that found it misled or defrauded members of Christian health nonprofit Sharity Ministries Inc., which is now liquidating in bankruptcy. Aliera acted as administrator for Sharity’s healthcare offerings, providing marketing, sales and other support services, according to court records. Sharity filed for chapter 11 in July and won court approval last week to wind down as its members pursue Aliera for roughly $318 million in allegedly unpaid medical bills. Now that Sharity has collapsed, its members are expected to recoup no more than 10 cents on the dollar on their claims, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del. Members have alleged in several lawsuits that Aliera’s founders created and controlled Sharity, using it to sell healthcare plans that looked like cheaper versions of genuine health insurance to vulnerable people needing coverage. As much as 84% of member payments were siphoned to Aliera and its owners, rendering Sharity insolvent and denying coverage of medical expenses that members said they were assured would be handled, according to court papers filed by Sharity members. Aliera’s failure to respond to lawsuits led federal judges to rule against it last month by default.

Johnson & Johnson is trying to figure out how to divide its supply chain and substantial financial holdings as part of a planned split into two publicly-traded businesses, the Wall Street Journal reported. The New Brunswick, N.J.-based healthcare and consumer-goods giant last month said it would split off its consumer-health business, which sells Tylenol medicines, Band-Aid bandages and Johnson’s Baby Powder, into a so-far unnamed company in 18 months to two years. The company is considering spinning out the unit and holding a stock offering. J&J’s consumer-health unit generated $14.1 billion in sales last year, compared with $45.6 billion for pharmaceuticals and $23 billion for medical devices, according to a filing with securities regulators. The company operated 90 manufacturing facilities globally at the end of 2020. J&J’s split won’t necessarily be more complex or challenging than those of other companies, but questions remain about how issues such as litigation will be handled, said Damien Conover, director of healthcare research at research firm Morningstar Inc. For example, it is unclear which business would handle future litigation relating to when the companies were one, he said. A spokeswoman for J&J declined to comment. The company in October placed into bankruptcy its liabilities for thousands of lawsuits tying talc-based products to cancer. “It’s pretty likely that litigation stays with the separate companies and the cash flows are strong enough to support that, but still, there’s a bit of uncertainty,” Mr. Conover said.

Members of wholesale power supplier Brazos Electric Power Cooperative Inc. are challenging its bankruptcy strategy following the Texas winter storm that knocked out power for millions and left Brazos with a $2 billion energy bill, Reuters reported. Tri-County Electric Cooperative, one of Brazos’s largest members, filed papers on Wednesday accusing Brazos of pursuing a restructuring proposal that would place the financial burden on the backs of retail and commercial ratepayers. Its statements came in an objection to Brazos’ request to extend its control over the bankruptcy process until March 28, 2022. Brazos, the largest electric coop in Texas, filed for chapter 11 protection in March after it was hit with a $2 billion energy bill from the state’s electric markets operator, the Electric Reliability Council of Texas (ERCOT). The bill for the seven-day storm is nearly three times the co-op’s total power cost from 2020, which was $774 million, according to court papers. For several days during the storm, ERCOT set electricity prices at $9,000 per megawatt hour, around 500 times the usual rate. Brazos and ERCOT have since been in litigation in bankruptcy court over the bill. Now, Brazos says it needs more time to file a reorganization plan with the court. But Tri-County and another major member, CoServ Electric, say Brazos has not seriously considered options that they say would bring in more money to the estate without sticking ratepayers with the bill. Tri-County and CoServ say that Brazos should consider selling some of its transmission, distribution and generation assets. Instead, they say, Brazos is focused on the securitization of the ERCOT claim, which they say would pass along significant costs to ratepayers.

Bidders for the bankrupt Limetree Bay oil refinery in the U.S. Virgin Islands are challenging the $33 million leading offer for the facility, saying their competing proposal to dismantle it is better for the local population, WSJ Pro Bankruptcy reported. Texas-based industrial manufacturer Bay Ltd. objected Wednesday to the refining complex’s proposed sale to St. Croix Energy LLLP, which wants to restart production there. The refinery on the island of St. Croix operated for a few months this year, after nearly a decade offline and a $4.1 billion refurbishment, until the Environmental Protection Agency suspended its permits in May due to pollution incidents. Bay and Sabin Metal Corp., the backup bidders that came in second at a bankruptcy auction, said their rival liquidation offer of $39 million would deliver more value for creditors, help fix longstanding pollution issues on St. Croix and create jobs for at least three years during the planned decommissioning. Limetree selected the St. Croix Energy offer as the leading bid. No sale can take place without approval from Judge David Jones of the U.S. Bankruptcy Court in Houston, who is overseeing the refinery’s chapter 11 case.

The investor who bought Philadelphia’s Hahnemann University Hospital before its collapse failed to win a bankruptcy court’s approval to take out a $17.5 million loan on the defunct healthcare center’s underlying real estate, WSJ Pro Bankruptcy reported. Joel Freedman was denied court approval to put up the former hospital’s property as collateral for a mortgage loan he said he needs to cover ongoing costs stemming from Hahnemann’s 2019 bankruptcy, which left him in control of its downtown real estate. After the bankruptcy, Hahnemann closed its doors for good despite protests from doctors, nurses and community groups. Bankruptcy administrators have been probing how Freedman split the hospital’s healthcare operations from its real estate, which wasn’t included in the chapter 11 filing. Freedman in October sought a bankruptcy-court order confirming he could encumber the properties to secure a $17.5 million loan from Gordon Brothers, a restructuring and investment firm. The proposed 15-month loan would refinance the existing mortgages on certain assets, including the premises once occupied by Hahnemann, while granting a first-priority lien to Gordon Brothers, according to court papers. Freedman said in court filings that, despite the hospital being closed, the property requires ongoing maintenance, security and upkeep to preserve its value. Professional fees and pension obligations stemming from Hahnemann’s closure are also adding up, according to his papers.

A U.S. judge yesterday questioned whether members of the Sackler family that owned Purdue Pharma abused the bankruptcy system, as she considers whether to overturn a ruling that shielded the Sacklers from liability over the opioid epidemic, Reuters reported. U.S. District Judge Colleen McMahon in Manhattan said that she wanted more information about more than $10 billion that the Sacklers, according to court documents, received from Purdue between 2008 and 2018, when they left the company’s board. “I’m looking for whether there was abuse,” she said during a hearing. One Sackler family lawyer replied that there was no evidence to suggest abuse. The Sacklers have denied wrongdoing and did not themselves file for bankruptcy. They contributed $4.5 billion to the bankruptcy settlement in exchange for protection against future litigation. Judge McMahon's remarks came during arguments over appeals of a bankruptcy court’s approval in September of Purdue’s reorganization plan, which included releases of future opioid-related civil claims against the Sacklers. The U.S. Department of Justice’s bankruptcy watchdog and a small group of states are challenging the plan's approval, claiming the Sacklers should not receive the legal protections it provides. Judge McMahon suggested that the Sacklers may have protected their wealth by taking as much money from Purdue as they could in the years before the bankruptcy. “People were aware claims were going to be asserted. Advisors told them to take steps to protect the family,” she said.