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The biggest electric power cooperative in Texas revived a fight over whether utilities and consumers should pay for billions of dollars in electricity charges imposed by state regulators during February’s extreme winter storm, WSJ Pro Bankruptcy reported. Brazos Electric Power Cooperative Inc., which collapsed into bankruptcy in March, filed court papers on Sunday challenging the right of the state’s grid operator to collect roughly $1.9 billion for electricity supplied during winter storm Uri. Brazos said the Electric Reliability Council of Texas violated its own rules on how to respond to extreme situations, such as when demand far exceeds available supply of electricity. The cooperative had said it filed for bankruptcy because it was unable to meet demands from Ercot, which raised electricity rates to the peak price of $9,000 per megawatt hour during the storm, compared with an average of roughly $22 per megawatt hour last year. A law passed last month empowers and mandates utilities to cover the costs of winter storm Uri by selling securitized debt backed by user surcharges. The legislation “didn’t provide the kind of relief Brazos was looking for, the cooperative’s lawyer Louis Strubeck said at a court hearing yesterday. While Brazos plans to explore securitization financing of some of its bills, it also plans to challenge part of the charges, he said.

Many survivors of fires caused by Pacific Gas and Electric (PG&E) in 2017 and 2018 are still waiting for compensation from the multibillion-dollar fire victim trust that the company set up, PBS Newshour reported on Sunday, according to The Hill. PG&E filed for chapter 11 protection in 2020, placing about 70,000 claims from fire survivors into the U.S. bankruptcy system. Around half of the deal that was struck in 2019, however, is payable through PG&E stocks. Many of the victims impacted by the fires caused by PG&E reportedly still lack the funds to rebuild their lives, two or three years after the fires took place. In an effort to prevent future wildfires caused by power lines, PG&E announced last week that it would spend between $15 billion and $20 billion to bury about 10,000 miles of its power lines.

Sen. Elizabeth Warren is bolstering efforts by Democratic lawmakers to stop the owners of OxyContin maker Purdue Pharma LP from using the company’s bankruptcy to shield themselves from lawsuits blaming them for the opioid crisis, WSJ Pro Bankruptcy reported. The Massachusetts Democrat is sponsoring a Senate bill set to be introduced next week that calls for prohibiting owners of bankrupt businesses or other individuals who haven’t filed personal bankruptcy from getting so-called nonconsensual third-party releases protecting them from litigation by government entities and private citizens. A companion bill in the House is also slated to be introduced next week. The type of legal protection the Sacklers seek has traditionally been available only to those filing for bankruptcy, Warren said. “If the Sacklers want to stop those lawsuits, they can file for bankruptcy just like normal people do when they’re overwhelmed by debts,” Warren said. “There is not one set of laws for everybody in this country and a special exception for rich people. The Sacklers are trying to get something special for themselves and I want to cut them off at the pass.” The Sacklers are offering to pay about $4.5 billion in exchange for protection from private lawsuits, as well as enforcement actions from states that oppose Purdue’s chapter 11 plan. The bankruptcy plan has the support of most creditor groups and more than 30 states but is opposed by a handful of other states, the District of Columbia and the Justice Department’s bankruptcy watchdog. Members of the Sackler family have denied wrongdoing and have said their settlement is an important step to help those suffering from opioid addiction. Lawyers for the Sacklers have said in court papers that family members who served on Purdue’s board acted “lawfully and ethically” and have been unfairly accused of contributing to the opioid crisis.

A Roman Catholic diocese in Connecticut filed for federal bankruptcy protection on Thursday to resolve dozens of lawsuits alleging the abuse of teenage students in the 1990s at the former Academy at Mount Saint John School, a residential treatment center for troubled youth in Deep River, the Associated Press reported. Documents filed by the Diocese of Norwich, which oversaw the residential facility, indicate it has $50 million to $100 million in estimated liabilities owed to 50 to 99 creditors. To date, nearly 60 former residents of the school have sued the diocese and a former bishop for damages, exceeding the diocese's current financial ability to pay, according a statement issued by the diocese. According to the filing, the diocese has $10 million to $50 million in assets. The diocese’s parishes, cemeteries, schools and religious orders are not part of the chapter 11 filing, which is not expected to have a direct impact on the day-to-day operations of those entities or the employment status, salaries and benefits of the diocese's employees or retirees, the bishop said.

On the day that the Roman Catholic Diocese of Rochester, N.Y., filed for bankruptcy protection in September 2019, Bishop Salvatore Matano renewed his apology to those who had suffered sexual abuse by priests or other church personnel, the Rochester Democrat and Chronicle reported. The volume of sexual abuse claims and the diocese's bankruptcy case are inextricably linked. Its chapter 11 filing came just a month after New York state opened a one-year legal window to file civil lawsuits for past instances of sexual abuse. Nearly two years have now passed since the Rochester diocese filed its chapter 11 petition with the diocese and victims still at an impasse. The deadline to file claims against the Diocese of Rochester came and went last August, but there have been few signs of any progress towards a resolution. Instead, the two main parties in the case have become deadlocked, filing a series of competing legal motions last month asking U.S. Bankruptcy Judge Paul Warren to intervene and complaining that the other side was being unreasonable in the court-ordered mediation process. Last week, Judge Warren made it clear that he’d had enough. At the outset of a hearing conducted by telephone July 9, Warren noted that he’d read every word of the more than 1,000 pages of legal filings, urging the parties to keep their oral arguments brief. What followed was each side explaining in great detail why the other side was responsible for the lack of progress in mediation. A lawyer representing abuse survivors accused the diocese of trying to make “backroom deals” with insurance companies to limit the amount of money available to pay survivors. Another lawyer, representing the diocese, countered that the amount of money being sought was “out of the stratosphere” and “completely unrealistic.” Eventually, Judge Warren appeared to tire of the back and forth and interjected. Judge Warren made clear that he expected to see some significant progress in the short term, and that if he were called upon again to resolve a stalemate, it was likely that everyone would walk away unhappy. “The court wishes to remind the parties that if the path to non-consensual resolution persists, all parties are at risk for an unfavorable outcome,” Judge Warren said.

Puerto Rico’s financial oversight board struck a bankruptcy deal with the main group of the island’s unsecured creditors, a breakthrough that promises to make it easier to win final court approval of its plan for cutting $35 billion of the government’s debt, Bloomberg News reported. The board and the unsecured creditors reached the understanding on Monday, Brian Rosen, a lawyer at Proskauer Rose LLP, told U.S. District Judge Laura Taylor Swain during a hearing Yesterday. The deal may put pressure on the remaining bond insurers that are among the last still fighting a proposed debt-restructuring plan. At the hearing, Puerto Rico and creditors are discussing the island’s plan for restructuring the last major chunks of debt to be dealt with in the four-year-long bankruptcy, including the government’s general-obligation bonds. On the eve of the hearing, Puerto Rico and the unsecured creditors reached an agreement that would increase their payouts to $575 million from $125 million, Rosen said.

West Virginia Attorney General Patrick Morrisey said he will oppose OxyContin maker Purdue Pharma’s bankruptcy plan, arguing that his state, one of the hardest hit by the opioid epidemic, would get shorted in settlement money, the Associated Press reported. “I remain vigorously opposed to a proposed allocation formula that would distribute settlement funds largely based on a state or local government’s population — not intensity of the problem,” Morrisey said yesterday. Purdue’s plan to reorganize into a new entity that helps combat the U.S. opioid epidemic got a big boost last week as 15 states that had previously opposed the new business model gave their support. The agreement from multiple state attorneys general, including those who had most aggressively opposed Purdue’s original settlement proposal, was disclosed last Wednesday in a filing in U.S. Bankruptcy Court in White Plains, New York. It followed weeks of intense mediations that resulted in changes to Purdue’s original exit plan.

The owner and the operator of a bankrupt downtown San Jose, Calif., hotel are now locked in widening and increasingly bitter legal hostilities after the filing of a lawsuit tied to the bankruptcy proceeding, the San Jose Mercury News reported. The conflict between the owner of the Fairmont San Jose hotel has morphed into a full-scale battle after the launch of the litigation, which was filed as a sibling proceeding arising from the ongoing chapter 11 case involving the landmark lodging. SC SJ Holdings, the affiliate led by business executive Sam Hirbod that owns the Fairmont San Jose, filed a lawsuit on June 29 in the U.S. Bankruptcy Court against Accor Management U.S., a large company that manages and operates hotels. The lawsuit is asking the court to find that the operator Accor Management has illegally interfered with the owner’s efforts to stabilize and protect the hotel, which has been closed since March 5, 2021, the day that the hotel filed for bankruptcy. The legal battle makes it clear that the hotel’s owner and the facility’s operator have become full-fledged adversaries at a time when the lodging stays closed and its reopening remains in limbo. The lawsuit also disclosed that the hotel’s finances and operations were already wobbly even ahead of the outbreak of the coronavirus that triggered business shutdowns to combat the deadly bug.