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The judge overseeing the Boy Scouts of America’s bankruptcy case said the youth group can press ahead with a proposed settlement of sex-abuse claims, while requiring that certain provisions be removed, WSJ Pro Bankruptcy reported. Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., indicated she would approve a restructuring agreement between the Boy Scouts and lawyers representing abuse survivors, rejecting arguments from insurance companies that it wasn’t the outcome of a fair negotiation. The restructuring deal is a cornerstone of a broader plan to end the Boy Scouts bankruptcy case, the largest ever filed over sexual abuse. Later this month, the Boy Scouts are expected to seek approval of chapter 11 plan disclosures that would give creditors enough information to vote yes or no. The bankruptcy plan also requires approval from Judge Silverstein, who said Thursday she wasn’t determining whether it would pass legal muster. But Judge Silverstein said that she wouldn’t approve certain aspects of the restructuring agreement, such as nullifying an earlier $650 million settlement between the Boy Scouts and insurer Hartford Financial Services Group Inc. The youth group’s obligations, if any, to Hartford must be decided separately, she said. Nor will she let the Boy Scouts cover millions of dollars in legal fees for lawyers that negotiated in the bankruptcy on behalf of abuse victims, she said. It is up to the Boy Scouts and the abuse survivors whether to file a chapter 11 plan consistent with her ruling, she said. The restructuring agreement is designed to lock in support for the bankruptcy plan from the bulk of the 82,500 men who stepped forward to seek compensation after the youth group filed for bankruptcy last year.

Former Purdue Pharma LP president Richard Sackler distanced himself from a program pitched years ago by consulting giant McKinsey & Co. to increase OxyContin sales and denied that his family or the company are responsible for the opioid epidemic, WSJ Pro Bankruptcy reported. Dr. Sackler said that although he remembered having a call with McKinsey about research it had done for the drugmaker, he said during testimony on Wednesday in Purdue’s bankruptcy trial he didn’t recall some details about certain marketing and sale programs including an initiative called “Evolve to Excellence” that federal authorities have alleged led healthcare providers to write medically-unnecessary prescriptions of OxyContin, an opioid painkiller. McKinsey agreed earlier this year to a $573 million settlement with state authorities over advice it gave Purdue and other drugmakers on opioid painkillers, without admitting wrongdoing. Dr. Sackler’s testimony about the E2E program came during the second week of a bankruptcy trial scrutinizing a proposed settlement of litigation against he and other members of Purdue’s controlling family alleging they bear responsibility for fueling the opioid crisis. If approved, the agreement would shield the Sacklers from civil lawsuits over OxyContin in exchange for roughly $4.5 billion from family members to fund opioid abatement programs. The family would also cede control of Purdue under the proposal, which is being challenged by a handful of state and federal authorities.

Members of the family that owns OxyContin maker Purdue Pharma won’t contribute billions of dollars to a legal settlement unless they get off the hook for all current and future lawsuits over the company’s activities, one of them told a court Tuesday in a rare public appearance, the Associated Press reported. David Sackler, grandson of one of the brothers who nearly 70 years ago bought the company that later became Purdue, testified at a hearing in federal bankruptcy court in White Plains, New York, that without those protections, “I believe we would litigate the claims to their final outcomes.” “We need a release that’s sufficient to get our goals accomplished,” Sackler said in response to questions from a lawyer for the U.S. bankruptcy trustee. “If the release fails to do that, we will not support it.” That’s the heart of argument over the settlement plans of the family and the company, based in Stamford, Conn. Two offices of the U.S. Justice Department, nine states and the District of Columbia are objecting to the company’s settlement plan largely because it would grant legal protection to members of the wealthy Sackler family even though none of them are declaring bankruptcy themselves.

A year and a half after the Boy Scouts of America sought bankruptcy protection amid an onslaught of child sex abuse lawsuits, a Delaware judge is poised to issue a ruling that could determine whether the organization might emerge from bankruptcy later this year, the Associated Press reported. Following a three-day hearing that ended Monday, the judge is mulling whether the Boy Scouts can pursue an $850 million agreement with attorneys representing a majority of the 82,500 abuse claimants in the case. Failure to win approval of the agreement could throw the case into chaos. The agreement involves the national Boy Scouts organization, the roughly 250 local Boy Scout councils, the official victims committee, and law firms representing some 70,000 men who say they were molested as youngsters by Scoutmasters and others. The Texas-based Boy Scouts have proposed contributing up to $250 million in cash and property to a fund for abuse victims. Local councils, which run day-to-day operations for Boy Scout troops, would contribute $600 million. The national organization and councils also would transfer their rights to Boy Scout insurance policies to the victims fund. In return, they would be released from further liability for abuse claims. The agreement is opposed by insurers that issued policies to the Boy Scouts and local councils, other law firms representing thousands of abuse victims, and various church denominations that have sponsored Boy Scouts troops.

More than 900 child sex abuse claims were filed against the Buffalo Diocese in federal bankruptcy court by Saturday, the deadline for abuse victims to come forward if they want part of a potential settlement that could cost the diocese tens of millions of dollars, Buffalo News reported. The number of claims was double the largest number ever filed in the more than 20 prior diocese bankruptcies in the U.S. since 2004. “The total count right now is 924,” said Ilan D. Scharf, attorney for the committee of unsecured creditors in the diocese bankruptcy case. “There are sometimes duplicate claims or amended claims and we’re still working through that, but 924 were filed.” Scharf also said that some claims may still be in the mail or have otherwise not been processed yet. The passing of the deadline Saturday clears the way for the pace of negotiations among the diocese, its insurers and abuse victims to pick up. The diocese filed for chapter 11 bankruptcy protection in February 2020 after it was named as a defendant in 260 Child Victims Act lawsuits. Diocese officials said there was no way the diocese could afford to continue its operations, while litigating or settling the lawsuits. At the time of the filing, diocese officials said they anticipated more than 400 potential claimants.

Boy Scouts of America yesterday made its final case for preliminary approval of a deal to resolve sex abuse claims, urging the judge overseeing its chapter 11 case to reject insurers’ efforts to thwart the settlement, Reuters reported. During a virtual hearing before U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware, Boy Scouts attorney Jessica Lauria argued that the $850 million settlement, was the organization’s best chance of distributing compensation to survivors and keeping the organization’s mission intact. The deal is supported by groups representing 70,000 sex abuse claimants and 250 local councils. The organization has apologized and said that it is committed to fulfilling its "social and moral responsibility to equitably compensate survivors." It said when it filed for bankruptcy in February 2020 that it knew "nothing can undo the tragic abuse that victims suffered" and believed the bankruptcy process was the best way to address the claims. If the judge approves the deal, the Boy Scouts will be able to move forward with a proposed reorganization plan that would allow it to exit bankruptcy by the end of the year.

A member of the billionaire Sackler family that owns Purdue Pharma LP will likely take the stand later this week in bankruptcy court as part of the drugmaker’s opioid settlement trial, Bloomberg News reported. David Sackler, a descendant of Raymond Sackler, provided a sworn, written statement to the bankruptcy court about the sweeping releases he and other family members will receive if Purdue’s bankruptcy judge approves its proposed settlement. He’ll be made available for live questioning sometime this week, lawyers confirmed during the drugmaker’s chapter 11 proceedings on Monday. The exact timing wasn’t immediately disclosed. The testimony will be the first time any member of the Sackler family has appeared live in front of Purdue’s bankruptcy judge. David Sackler testified at a House Oversight Committee meeting in December, denying claims that his family improperly shifted billions of dollars from sales of the controversial opioid-based painkiller OxyContin to offshore accounts. Purdue is in the midst of a multi-week trial over its proposed settlement of trillions of dollars in legal liabilities. The deal, which the company says is worth more than $10 billion in total, would see members of the Sackler family pay about $4.3 billion in exchange for broad protection from OxyContin lawsuits. Some critics of Purdue’s bankruptcy argue that the chapter 11 proceedings have allowed the drugmaker’s owners to avoid accountability for their role in the U.S. opioid crisis. The proceedings are taking place remotely due to COVID-19 protocols, and Sackler would testify by videoconference. Members of the public can listen in by telephone.