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The trial over Purdue Pharma’s settlement of opioid-related litigation will last up to 11 days, a judge said yesterday, warning parties that he will "cut people off if they are wasting time." During a virtual status conference, U.S. Bankruptcy Judge Robert Drain in White Plains, New York set the stage for the trial that will determine whether the OxyContin maker can bring its nearly two-year-long chapter 11 case to a close, Reuters reported. Purdue’s bankruptcy reorganization plan rests on a settlement with the Sackler family members that own the company which protects them from future opioid-related claims in exchange for a $4.5 billion contribution to the deal. The settlement has support from U.S. states, municipalities, hospitals, and individuals, but faces opposition from a handful of states and the U.S. Department of Justice’s bankruptcy watchdog, the U.S. Trustee. Purdue says that the deal, which steers funds toward opioid abatement programs, is worth more than $10 billion. Critics of the settlement oppose the “third-party releases” that would provide legal protections to the Sacklers. The company has said that without the releases, the entire settlement, including billions of dollars for state and local opioid abatement programs, would collapse. The trial will begin on Aug. 12 and continue for two weeks.

OxyContin maker Purdue Pharma LP laid out a defense of its chapter 11 plan, containing a multibillion-dollar settlement with its owners, before a high-stakes bankruptcy trial pitting the company against certain government authorities, WSJ Pro Bankruptcy reported. Purdue said its proposal provides the most money possible to fight the opioid crisis and rebutted legal challenges from nine states, the District of Columbia as well as the Justice Department’s bankruptcy unit in a 232-page legal brief filed in the U.S. Bankruptcy Court in White Plains, N.Y. The filing, submitted on Thursday, previews legal arguments that will be central to the trial, scheduled to start next week. If Purdue prevails and its plan is approved by U.S. Bankruptcy Judge Robert Drain, the business would emerge from bankruptcy as a new company tasked with addressing the epidemic and providing treatment for opioid addiction and overdoses. The plan is backed by most states and is broadly supported by committees representing the interests of opioid victims and local governments. Purdue filed for bankruptcy in September 2019, seeking refuge from lawsuits blaming it for fueling the opioid crisis. The company last year pleaded guilty to federal felonies over its sale and marketing of opioids. On Thursday, Purdue said the plan it forged since its chapter 11 filing dedicates most of its assets “to funding critical and much needed opioid abatement programs in communities that have long been impacted by the opioid crisis.”

Shareholders in Mallinckrodt, the Dublin-based but U.S.-run drugmaker in the middle of a bankruptcy reorganization, are being urged by a leading corporate advisory firm to vote against some directors as a parting rebuke over its handling of the U.S. opioid crisis and executive pay, the Irish Times reported. Mallinckrodt filed for bankruptcy in Delaware last October as the company was overwhelmed by lawsuits accusing it of deceptively marketing opioids. The company is pursuing a U.S. court-supervised chapter 11 reorganization that would set up a $1.6 billion trust to resolve opioid-related claims with states, local governments and private individuals. The plan, supported by certain creditors and subject to broader votes by early September, would see unsecured bondholders take control of the company, some $1.3 billion of debt being eliminated and general unsecured creditors split $150 million in cash. Existing shareholders are set to be wiped out by the debt restructuring. Glass Lewis, an influential shareholder advisory firm on corporate governance, is calling on investors to vote against the re-election of board members Martin Carroll and Kneeland Youngblood at the group’s annual general meeting in Dublin next month. Both have been members of Mallinckrodt committees covering governance and compliance since the company floated in New York in 2013. Almost 500,000 people died from overdoses involving opioids, including prescription and illicit drugs, in the US in the 20 years to 2019, according to figures from the US Centres for Disease Control and Prevention. Mallinckrodt was the third opioid maker to seek chapter 11 bankruptcy protection.

U.S. District Judge Ann D. Montgomery has issued an order closing the receivership of Thomas J. Petters and discharging the Receiver in one of the nation’s largest and most complex Ponzi schemes, according to a DOJ press release. Through the efforts of the receiver, the U.S., and related bankruptcy trustees more than $722 million was distributed to victims and creditors. The U.S. commenced the receivership case in October of 2008 to enjoin the ongoing fraud by Petters and the other named defendants and to preserve all assets owned by the defendants for ultimate restitution and forfeiture in the criminal investigations of the defendants, which were pending at the time. The U.S. immediately moved to freeze the assets of the named defendants, including all assets owned by Petters. On October 14, 2008, the court issued the injunction against Petters and appointed Douglas A. Kelley as the receiver of the assets of Petters and the other named defendants. At the time none of the defendants had yet been indicted. The receiver immediately began taking control of the assets and property owned by Petters and the other named defendants. Petters and the other defendants had created a vast web of more than 150 entities over the course of thirteen years — entities that were all propped up by fraud. Some of the entities, however, were legitimate businesses that employed innocent persons.

Young Buck is accused of refusing to turn over the royalties he was paid despite owing thousands to creditors, RadarOnline.com reported. According to court documents obtained by Radar, the trustee presiding over Buck’s bankruptcy has filed a suit demanding the rapper turn over ASCAP checks. Back in January 2020, Young Buck (real name: David Darnell Brown) filed for chapter 13 bankruptcy in Tennessee Court. In his petition, the rapper said he pulled in $4,450 a month and his monthly bills totaled $1,490. However, he had assets totaling $5,761 with liabilities totaling $48,316.20 His biggest debt was $45,766.20 owed in back child support. He also owed $1,250 in taxes and other debts. Buck also listed 50 Cent as a possible creditor. The two have had beef ever since 50 kicked Buck out of G-Unit. The court documents revealed Buck’s dire financial situation. He said he was using his girlfriend’s car for transportation at the time of his filing. His assets included his household furniture worth around $360, clothes worth $100, and $100 worth of jewelry.

A noted art dealer was arrested today on federal charges accusing him of embezzling more than $260,000 from the bankruptcy estate of Ace Gallery, a Los Angeles, Calif.-based art gallery, while acting as the estate’s trustee and custodian, according to a DOJ press release. Douglas J. Chrismas, of the Mid-Wilshire area of Los Angeles, surrendered without incident this morning to special agents of the FBI. A federal grand jury charged Chrismas via indictment with three counts of embezzlement against a bankruptcy estate. Chrismas was ordered released on $50,000 bond. He has pleaded not guilty to the charges and a September 21 trial date has been scheduled in this matter. According to the indictment returned on March 16 and unsealed today, Chrismas was the president and CEO of Art and Architecture Books of the 21st Century, which did business as Ace Gallery and was located on the Miracle Mile in the City of Los Angeles. In February 2013, Ace Gallery filed a chapter 11 petition in Los Angeles and continued to operate as a bankruptcy estate with Chrismas acting as the gallery’s president, trustee, custodian and overseer of its operations. In this role, Chrismas also had access to the gallery’s property. Chrismas remained in control over Ace Gallery until April 2016, when an independent bankruptcy trustee was appointed to run the bankruptcy estate and Chrismas was removed as trustee and custodian.

The judge overseeing Purdue Pharma’s chapter 11 case has tentatively approved $16.1 million in retention payments for 506 of the company's employees but conditioned his ruling on the OxyContin maker’s successful reorganization, Reuters reported. During a virtual hearing, U.S. Bankruptcy Judge Robert Drain in White Plains, New York, said that he would sign off on the payments — which he said are not the same as bonuses because they are part of the employees’ annual compensation — as long as Purdue doesn’t wind up liquidating in bankruptcy, which at this point in the case is a long shot. Meanwhile Purdue postponed a hearing on up to $5.4 million in proposed incentive bonuses for five top executives until Aug. 19. The company, which filed for chapter 11 protection in September 2019 to address thousands of lawsuits accusing it of fueling the opioid crisis through deceptive marketing, is expected to begin a multi-day hearing to secure Judge Drain’s approval of its restructuring plan and settlement with individuals, states, municipalities, hospitals and others on Aug. 9.