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Intelsat SA is facing increasing opposition to its proposed reorganization plan as certain creditors and shareholders accuse the satellite communications provider of caving to the demands of one favored creditor group and failing to conduct an impartial probe into pre-bankruptcy transactions, Reuters reported. In court papers filed on Monday, a group of noteholders urged U.S. Bankruptcy Judge Keith Phillips in Richmond, Va., to reject the plan, saying it improperly shifts most of the company’s value to one set of creditors and institutional shareholders, including hedge fund Appaloosa, at the expense of others. The plan, if approved, would cut Intelsat’s debt from $15 billion to $7 billion and hand control of the company over to unsecured bondholders of subsidiary Intelsat Jackson Holdings SA. Intelsat filed for bankruptcy in May 2020 to restructure its debt as it prepared to transfer some of its C-band spectrum to the U.S. Federal Communications Commission. In exchange, Intelsat is receiving about $4.9 billion. The noteholder group also accused directors that signed off on the plan of being conflicted and settling certain claims to protect themselves against potential liability arising from pre-bankruptcy transactions, including restructuring deals, decisions relating to the FCC payments and accusations of insider trading. The noteholders allege that the directors agreed to the "favored" creditor group's demands after it threatened to sue them personally.

The lawyer who oversaw payments to victims of the Sept. 11 terrorist attacks has agreed to mediate part of the fight between Johnson & Johnson and thousands of women who claim the company’s baby powder causes ovarian cancer, Bloomberg News reported. Kenneth R. Feinberg would share duties with another mediator as part of an effort to resolve nearly 14,000 lawsuits against J&J and its former supplier, Imerys Talc America. Imerys filed bankruptcy in Delaware in 2019 with plans to force J&J to help pay for a victim’s trust that would settle all current and future lawsuits. J&J claims it isn’t responsible for helping Imerys. During a virtual court hearing Monday, U.S. Bankruptcy Judge Laurie Selber Silverstein said she will likely sign an order setting up the mediation once lawyers submit a final version. The talks are unlikely to resolve all of the baby powder lawsuits that J&J faces because the mediation only covers liabilities faced by Imerys and another talc mining company. J&J is involved because it has previously promised to indemnify Imerys against all talc lawsuits. To try to end all current and future baby powder claims, J&J put a unit into bankruptcy with plans to pay at least $2 billion into a victims trust. J&J faces about 38,000 lawsuits claiming the talc in its baby powder was tainted and causes ovarian cancer and other health problems, mostly in women.

A bankruptcy judge threatened to send two shareholders of Eagle Hospitality Real Estate Investment Trust to jail, finding the “fraudsters” had defied court orders to account for an illicit $2.4 million government loan, WSJ Pro Bankruptcy reported. Taylor Woods and Howard Wu took out a government-backed loan on behalf of the bankrupt hotel company “without authority and absconded with the proceeds,” leaving either Eagle Hospitality or the taxpayer on the hook, according to yesterday’s ruling by Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington, Del. “Messrs. Woods and Wu are fraudsters,” the judge wrote in an opinion published Monday. He said that he would consider what sanctions to impose, including potential incarceration, at a hearing on Friday. The judge had previously ordered the two men to account for the government funds they received and show that they’ve not dissipated their assets. Eagle Hospitality filed for bankruptcy in January and was broken up in chapter 11, selling 14 of its hotels for $480 million and turning over the keys to 1930s ocean liner Queen Mary, which it had leased from the city of Long Beach, Calif. In May, Eagle Hospitality sued Mr. Woods and Mr. Wu, seeking to recover $2.4 million in funds it alleged they received on behalf of the Queen Mary operations under the Paycheck Protection Program, the popular program of forgivable, government-guaranteed loans designed to keep checks flowing to Americans during the COVID-19 pandemic.

LeClairRyan co-founder Gary LeClair continues to seek an escape from litigation initiated by the bankruptcy trustee for the defunct firm, arguing in a filing Nov. 12 that he himself lost $2 million as a consequence of the firm’s 2018 collapse, Law.com reported. LeClair, who was added as a defendant to trustee Lynn Tavenner’s suit against alternative legal service provider UnitedLex in August and accused of conspiring to bleed the firm dry, described the allegations against him as a “fantasy.”

Lawyers for the Boy Scouts of America are scrambling to mitigate potential damage they say was caused by an “inflammatory” email sent to thousands of men who say they were sexually abused by troop leaders ahead of a key deadline in the youth organization’s bankruptcy, Reuters reported. U.S. Bankruptcy Judge Laurie Selber Silverstein in Delaware said during a virtual hearing on Friday that she thinks the email distributed by lawyers for the official committee representing survivors in the bankruptcy may constitute "a breach of professional ethics." The email, authored by plaintiffs’ lawyer Tim Kosnoff, urged survivors to vote against the Boy Scouts of America (BSA) reorganization plan, which rests on a proposed settlement of more than 80,000 sex abuse claims. It also included what BSA described as attacks on other lawyers in the case and inaccurate statements about the plan. BSA's lawyers said the email could have “disastrous effects” by confusing survivors and tainting their votes on the plan, which are due Dec. 14. The organization needs the votes to settle the claims and exit bankruptcy.

SL Green Realty Corp., the property manager of a bankrupt Manhattan skyscraper backed by Chinese conglomerate HNA Group, said the building owner’s chapter 11 filing should be thrown out because it was filed in bad faith to keep it from losing control of the property, WSJ Pro Bankruptcy reported. SL Green, which is also a preferred equity investor in the HNA-backed building owner of 245 Park Avenue, said in court papers that the chapter 11 filing of PWM Property Management LLC was meant to thwart a forced sale. New York-based PWM sought protection from creditors last month in the U.S. Bankruptcy Court in Wilmington, Del., blaming SL Green for alleged substandard property management. SL Green has denied mismanaging the property and said the bankrupt “shell companies” that went into chapter 11 have no employees and aren’t insolvent, with assets exceeding liabilities by roughly $300 million. PWM has said it would use the bankruptcy proceedings to end its agreement with SL Green and hire a new property manager. On Friday, PWM lawyer Thomas Lauria said that the allegations in SL Green’s motion to dismiss the chapter 11 cases are without merit. SL Green, which has invested roughly $150 million in the building, said one reason that 245 Park was placed in bankruptcy is to prevent SL Green from exercising its rights to force a sale of 245 Park. SL Green said that its consent was required, but not sought, for 245 Park to file for bankruptcy.

135-year-old company Johnson & Johnson is joining a growing roster of iconic American businesses that are splitting up as they seek to please restive shareholders and move past recent controversies, the New York Times reported. Johnson & Johnson on Friday announced plans to spin off its consumer-products division — famous for household-name but not-very-lucrative brands like Tylenol, Band-Aid and Neutrogena — into a separate company. Johnson & Johnson will keep its more profitable, faster-growing businesses in pharmaceuticals and medical devices. The planned breakup comes after years of tribulations for Johnson & Johnson. The company is juggling lawsuits for its role in the opioid epidemic and over accusations that the talc once used in its baby powder had caused cancer in some customers. Even the company’s single-shot COVID-19 vaccine, once expected to be widely used around the world, has fallen far short of its promise because of production problems and fears about rare side effects. Johnson & Johnson, with headquarters in New Jersey, is part of a parade of once-proud companies that have recently unveiled plans to break themselves up or radically shrink. This week alone, the industrial conglomerates General Electric and Toshiba announced that they would split up. In recent years, pharmaceutical companies including Merck, Pfizer and GlaxoSmithKline have also shed or reorganized their consumer-products operations to focus on businesses, in particular drugs, that enjoy fatter profit margins.