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The Bishop’s Lodge hotel in Santa Fe, N.M., part of the Auberge Resorts Collection, filed for bankruptcy Monday blaming mismanagement and construction delays amid a feud between the luxury resort’s owners, WSJ Pro Bankruptcy reported. The resort, which has been adding guest rooms and new amenities like horseback trail-riding and trout fishing, filed a chapter 11 petition in the U.S. Bankruptcy Court in Wilmington, Del., seeking to restructure close to $80 million in debt. Owned by private investors and run by high-end resort manager Auberge Resorts LLC, Bishop’s Lodge enters bankruptcy with the support of most of its owners and an agreement to transfer a 100% stake to a senior lender in exchange for roughly $34 million in debt forgiveness. Construction on the resort was originally scheduled for completion in mid-2018, though after a series of delays it was only able to initiate a “soft reopening” on July 1. HRV Santa Fe LLC, a private company and stakeholder in the resort, previously served as manager. HRV hired different general contractors to renovate the property but dismissed them, causing delays and cost overruns, according to a declaration filed to the court by Michael Norvet, president of the holding company that owns the resort.

The judge overseeing Purdue Pharma’s bankruptcy on Friday urged opponents of the OxyContin maker’s reorganization plan, which would resolve widespread opioid litigation, to settle quickly with the company’s Sackler family owners because it would save time and money on appeals later, Reuters reported. U.S. Bankruptcy Judge Robert Drain made his remark during a hearing on Friday morning, five days before he is set to rule on the plan. The deal, if approved, would clear a path to resolve thousands of opioid lawsuits and shield the Sackler family owners from future litigation. Opponents of the deal have said the releases are too broad. “I think, having heard the lawyers from both sides — they are very talented lawyers, they know the risks they face —I would hope their clients would also be realistic about those risks,” Judge Drain said. Purdue has said the deal, which directs funding toward opioid abatement programs, is worth more than $10 billion. The Sacklers have agreed to contribute approximately $4.5 billion.

The Boy Scouts of America is pushing to exit bankruptcy after seeking chapter 11 protection last year from a growing number of sex-abuse claims, WSJ Pro Bankruptcy reported. The bankruptcy case, which spotlighted past failures by the organization to protect children, may be nearing its end as a settlement offer gains momentum. The youth group has said it needs to make peace with sex-abuse victims for its mission to survive. Sex-abuse claims dogged the Boy Scouts for years, especially after a court-ordered release in 2012 of internal files on reports of abuse by volunteers. The youth group turned to bankruptcy when states including New York, New Jersey and California suspended statutes of limitations on abuse claims, opening the door to lawsuits alleging childhood trauma regardless of when it happened. The Boy Scouts filed for chapter 11 protection in February 2020 amid intensifying legal pressure over alleged abuse and with billions of dollars of land, buildings, cash and investments to protect. The chapter 11 filing covered the national Boy Scouts organization headquartered in Irving, Texas, but excluded roughly 250 affiliated local councils across the U.S. that hold the bulk of the 111-year-old institution’s wealth, much of it in property holdings. Part of the chapter 11 strategy was to blunt the financial consequences of sex-abuse litigation for the local councils, which are chartered by the Boy Scouts to administer scouting programs. When the bankruptcy began, the Boy Scouts reported roughly 275 pending lawsuits alleging sexual misconduct by employees or volunteers, and roughly 1,400 other known abuse claims. The number of claims ballooned to 82,500 after the youth group urged abuse victims to step forward and file claims by a bankruptcy-court deadline last year. Reaching a financial settlement will help preserve the mission of the Boy Scouts, according to the youth group, which has also apologized to victims.

A Delaware judge declined to prohibit Johnson & Johnson from separating talc-related liabilities from the rest of its business, ruling against personal-injury lawyers who said they fear the company could place thousands of cancer claims into bankruptcy to try to drive settlements, WSJ Pro Bankruptcy reported. Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., on Thursday didn’t bar J&J from separating talc liabilities from other assets, a corporate move that injury claimants see as a likely first step toward placing tens of thousands of tort claims in chapter 11. As of July, the healthcare company faced roughly 34,600 lawsuits linking its talc-based baby powder to ovarian cancer, asbestos cancer and other illnesses. In settlement talks, the company has said it could isolate its talc liabilities within a new corporate entity that could then file for bankruptcy. Separating tort liabilities from corporate assets is possible under a Texas statute through what are known as divisional or divisive mergers. They have been used by several businesses facing large numbers of asbestos claims in recent years to silo those liabilities in newly formed units that were then placed in chapter 11. J&J hasn’t disclosed any strategy for the talc lawsuits other than to defend the safety of its products in pending cases. The company also hasn’t denied that a divisive merger for its talc liabilities is a possibility, Judge Silverstein said earlier this week. Injury claimants said that would be a first step toward shifting talc liabilities into a bankruptcy proceeding, shielding J&J from further jury trials. Talc claimants asked to restrain J&J on the theory that its alleged strategy would harm the reorganization efforts of another company, Imerys Talc America Inc., which mined and supplied talc for J&J for decades before its 2019 bankruptcy. The judge said yesterday that the injury claimants have no legal standing to seek such an injunction against J&J because they have no direct interest in the contractual arrangements between the company and Imerys.

A U.S. judge said yesterday that he now anticipates a ruling on OxyContin maker Purdue Pharma LP’s bankruptcy reorganization plan on Wednesday of next week instead of this week because he needs more oral argument on certain issues, Reuters reported. U.S. Bankruptcy Judge Robert Drain was originally expected to rule on Friday, Aug. 27. Judge Drain did not specify the issues on which he needs to hear more. If Judge Drain approves the deal, it would clear a path to resolve thousands of opioid lawsuits and shield the company’s wealthy Sackler family owners from future litigation. The plan, which Purdue values at more than $10 billion, would dissolve the drugmaker and shift assets to a new company not controlled by Sackler family members. The new company would be owned by a trust run to combat the opioid epidemic in U.S. communities that alleged the company and its owners aggressively marketed the painkiller OxyContin while playing down its abuse and overdose risks. The plan also includes legal releases shielding Sackler family members from future opioid litigation, a controversial provision that some states opposed. Congressional Democrats in recent weeks circulated legislation to block such legal releases and urged the Justice Department to appeal the plan, efforts that failed to gain traction.

U.S. Attorney David C. Weiss announced today that Connections Community Support Programs, Inc. (“CCSP”) has agreed to the entry of consent judgments totaling over $15,300,000 to resolve two lawsuits brought by the federal government alleging health care fraud arising under the federal False Claims Act and violations of the Controlled Substances Act, according to a DOJ press release. Prior to the sale of its assets in bankruptcy, CCSP provided a variety of mental health and addiction treatment services at numerous locations throughout Delaware. CCSP has agreed to the entry of a judgment in the amount of $13,757,520.60, plus interest, to resolve claims that CCSP violated the False Claims Act by billing for mental health services performed by individuals whose professional qualifications did not allow them to bill Medicare or Medicaid for reimbursement and by billing Medicaid for mental health services using incorrect procedure codes for the person performing the service, resulting in higher payments than were permitted. CCSP has also agreed to the entry of a judgment in the amount of $1,621,571, plus interest, to resolve claims that it violated the federal Controlled Substances Act by negligently failing to keep proper records of its use of controlled substances, including methadone and buprenorphine, in its treatment of patients with substance use disorders and by transferring controlled substances between locations without proper documentation.

During the final day of argument in Purdue Pharma’s bankruptcy trial, lawyers for the OxyContin maker said its proposed $10 billion settlement of opioid claims is by far the best deal for creditors, Bloomberg News reported. Seeking to convince U.S. Bankruptcy Judge Robert Drain that Purdue’s proposal is better than a liquidation of the business and free-for-all litigation stampede against itself and its owners, Marshall Huebner of Davis Polk & Wardwell, said the plan would deliver at least $5.5 billion of cash to creditors. The fact that most U.S. states now support the deal rather than pushing to continue their own “speculative” lawsuits shows the deal is sufficient, he added. Still, about 10 state attorneys general are challenging the deal, arguing in large part that they should be able to sue Purdue’s owners, members of the billionaire Sackler family, regardless of the settlement. Purdue has said that wouldn’t work, because its owners are requiring broad legal immunity from opioid lawsuits in exchange for more than $4 billion of their own cash, and allowing some states to go forward would cause the entire settlement to unravel. Members of the Sackler family have previously denied any wrongdoing. Reuters reported that Judge Drain expects to rule on Friday on the OxyContin maker’s request to approve its settlement of opioid-related litigation.

A group of cancer victims blaming Johnson & Johnson’s talc-based baby powder for the disease asked a Missouri court to block the company from taking steps to place its talc liabilities into chapter 11, while a bankruptcy judge in Delaware expressed doubts about a nearly identical request pending there, WSJ Pro Bankruptcy reported. Personal-injury claimants asked the Missouri court yesterday for an injunction preventing J&J from splitting its core assets from its liabilities to tens of thousands of individuals who allege they developed ovarian cancer, asbestos cancer and other diseases after exposure to the company’s talc-based baby powder. J&J declined to comment on the Missouri request, which escalates a confrontation between injury claimants and the company about its intentions for dealing with roughly 34,600 lawsuits pending against it as of June alleging personal injuries from talc. Also on Tuesday, a bankruptcy judge in Wilmington, Del. deferred ruling on a separate request by other injury claimants to pre-empt J&J from separating its talc liabilities from its core business, a potential first step toward moving thousands of injury claims into chapter 11.

Not quite a decade ago, the potential for defective Takata Corp. air bags to explode in a crash erupted into the global auto industry’s most complex and far-reaching safety crisis in history. While roughly 100 million of them were recalled worldwide, more than 14 million as of early July still hadn’t been fixed in the U.S. alone, in addition to an unknown but likely substantial number in the rest of the world. That means that millions of car owners — especially those in countries with weak consumer protections — may remain unaware that the propellant used in their cars’ air bags could be degrading as a result of heat and humidity, turning their vehicles into potential explosion hazards. At least 37 fatalities and 450 injuries allegedly linked to the defective parts worldwide have been reported to U.S. auto safety regulators. Of the deaths, 19 were in the U.S., while others have been reported from all corners of the globe, including in French Guiana, Nigeria, Brazil, Australia, and China.

Purdue Pharma LP yesterday defended a $4.5 billion settlement with the drugmaker’s Sackler family owners, saying that the proposed deal averts a long, costly legal fight to access family wealth housed overseas and in hard-to-reach trusts, WSJ Pro Bankruptcy reported. Marshall Huebner, a lawyer representing Purdue, said during closing arguments of a trial scrutinizing the settlement that the company believes it has strong legal claims against the Sacklers, including clawing back transfers made to the family before Purdue’s 2019 bankruptcy filing. But even if the lawsuits were successful, Huebner said, collecting any judgments in excess of the $4.5 billion provided by the settlement would be hard because the Sacklers have wealth and assets in trusts, and some family members live overseas. Settling with the Sacklers is a cornerstone of Purdue’s broader plan to exit chapter 11 as a new public benefit company while cutting ties to its founding family. The alternative of lengthy and expensive lawsuits would be “litigated to the bitter end by the Sacklers,” Huebner said. A committee representing Purdue’s unsecured creditors also said that recovering any potential judgment would pose additional difficulties because many of the family’s assets are in overseas trusts. The benefits of settling with the Sacklers, rather than pursuing them through litigation, was part of the company’s final defense of its reorganization plan. Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., is expected to decide within days whether to approve the settlement, which has broad support from groups representing personal injury claimants, governments and most states. Settlement funds would be used to fund opioid abatement programs across the country.