%1

The Archdiocese of St. Paul and Minneapolis announced June 17 it has fulfilled its remaining $3 million obligation to clergy abuse survivors ahead of schedule in its $210 million bankruptcy settlement, the Catholic Spirit reported. The archdiocese filed for bankruptcy protection in January 2015 in the wake of mounting claims of clergy sexual abuse dating back as far as the 1940s. Ultimately 453 claims were filed against the archdiocese during the claim-filing period, most of which were related to lawsuits brought against the archdiocese during a three-year-lifting of the statute of limitations on child sexual abuse claims in Minnesota. In May 2018, the archdiocese announced it had reached a $210 million settlement. The $3 million is the balance left on a $5 million promissory note as part of the bankruptcy settlement, in which the archdiocese agreed to contribute $1 million to the abuse survivors’ trust each year for five years.

Purdue Pharma LP’s bankruptcy judge on Wednesday approved a narrow probe of the OxyContin maker’s corporate governance despite calling part of the request that prompted it “a load of hooey,” Bloomberg News reported. U.S. Bankruptcy Judge Robert Drain approved an investigation into whether the drugmaker’s owners, members of the billionaire Sackler family, have had undue influence on an independent committee of Purdue board members. That so-called special committee reviewed potential lawsuits against the family members and is seeking a settlement instead of litigation. The appointment is the latest twist in a bankruptcy case that has aired the grievances of those affected by the opioid crisis — from states and cities to individuals. By one measure, Purdue is facing legal claims totaling more than $40 trillion, or about double the U.S. GDP in 2020. It’s trying to settle those claims by handing Purdue’s assets to a trust for the benefit of cities and states, who would use the money on opioid crisis abatement. In a contentious five-hour hearing, Judge Drain said there’s no evidence to suggest the board members’ independence has been compromised, but decided the court papers filed to request the investigation were so misleading that a probe is needed to remove any “taint” over the bankruptcy process.

The Flint, Mich., water criminal case involving former Gov. Rick Snyder took a strange side trip yesterday into bankruptcy court where his lawyers asked a judge to penalize state attorneys for distributing confidential documents from Detroit's historic financial restructuring, the Associated Press reported. The documents were related to private talks between Detroit, the state and creditors while the city was trying to emerge from bankruptcy in 2014. Snyder's administration played a key role in groundbreaking deals. Armed with a search warrant in 2019, prosecutors in the attorney general's office obtained documents from computer servers controlled by other state attorneys who had represented Snyder in matters related to Flint's lead-contaminated water. The search apparently swept up sensitive documents from the Detroit bankruptcy as well as attorney-client communications of other state officials, Snyder attorney Charles Ash said. “There has been a massive breach. ... We don’t know how this happened and don’t really know the full extent of the problem," Ash told Bankruptcy Judge Thomas Tucker. The records were given to other people charged with crimes in the Flint water scandal because prosecutors have an obligation to share documents with defense lawyers.

The Education Department has approved another $500 million in loan-forgiveness requests from former ITT Technical Institute students who say they were swindled by the now-defunct chain of schools, as the Biden administration expands its use of debt-relief programs, the Wall Street Journal reported. The loans of 18,000 former students are being forgiven under a legal provision known as borrower defense to repayment, which allows students to have their debts erased if they prove they were defrauded by their schools. The group whose loans were addressed Wednesday said the for-profit ITT Tech provided deceptive information about their employment prospects and whether credits earned there would transfer to other schools. ITT Tech shut down in 2016, after the government banned it from enrolling new students receiving federal aid. The chain offered degrees in fields including criminal justice, computer drafting and nursing. The Education Department said it found that between 2005 and when ITT closed in 2016, the school made “repeated and significant misrepresentations” to students about their expected jobs and earnings after graduation, and lied from 2007 through much of 2014 about how other schools would view credits earned at ITT.

A U.S. bankruptcy judge has upheld court decisions that the state of Montana lacked legal standing to file an involuntary bankruptcy petition nearly a decade ago against Yellowstone Club co-founder Tim Blixseth, the Associated Press reported. Judge Mike N. Nakagawa of Nevada on June 3 confirmed the ruling by previous judges to dismiss the involuntary petition, noting the case has lingered for nearly 10 years. The U.S. Court of Appeals for the Ninth Circuit ruled in 2019 the Montana Department of Revenue (MDOR) lacked legal standing to file an involuntary bankruptcy petition against Blixseth and referred the case to bankruptcy court to see if it should be dismissed. The Yellowstone Club, a private ski and golf resort in Big Sky founded by Blixseth and his now ex-wife in 1997, filed for bankruptcy in 2008. Blixseth was accused of pocketing much of a $375 million Credit Suisse loan to the resort and later gave up control of the enterprise to his ex-wife during their 2008 divorce. The club, which has touted billionaire Microsoft co-founder Bill Gates and former Vice President Dan Quayle as members, has emerged from bankruptcy under new ownership. The Montana Department of Revenue had done an audit of Blixseth and in 2009 said he owed $56.8 million in taxes, penalties and interest arising from eight audit issues, court documents stated. The Montana action against Blixseth is separate from Blixseth’s claims against Montana in Nevada for damages due to the involuntary petition.

Washington Prime Group Inc., a real estate investment trust that operates enclosed malls and strip centers across the U.S., filed for bankruptcy after the COVID-19 pandemic curtailed in-person shopping, Bloomberg News reported. The chapter 11 filing in Houston will allow Washington Prime to continue operating while it seeks to implement a restructuring agreement that it reached with certain creditors, according to a board resolution filed with the bankruptcy petition. The company, which estimated its assets at about $4 billion and debt of almost $3.5 billion, secured an up to $100 million debtor-in-possession loan that would help fund operations during court proceedings. The Columbus, Ohio-based firm that operates around 100 malls, saw its bonds tumble into distressed territory in 2020 as rent collections dried up and tenants filed for bankruptcy or went out of business. It began negotiating with its creditors last year and skipped a $23 million bond interest payment in February. Creditors had been extending a forbearance agreement amid the talks.

California power authority Western Community Energy said Friday it is winding down operations just weeks after filing for bankruptcy because it doesn’t have the money to purchase power for customers during the hot summer months, WSJ Pro Bankruptcy reported. WCE said it is working with state regulators to transition its approximately 100,000 customers to private utility Southern California Edison without interruptions to their electricity service. The public power authority based in Riverside, Calif. had hoped filing for bankruptcy protection last month would provide a financial respite so it could reorganize its balance sheet, raise financing and stay in operation. WCE only began providing electricity last year to residents and businesses in Perris, Norco, Wildomar, Eastvale, Hemet and Jurupa Valley — cities in Riverside County near Los Angeles. The power authority said Friday it decided to cease service after concluding it wouldn’t have the financial resources needed to purchase power for customers in July, when temperatures in the area regularly exceed triple digits. Soaring energy use during COVID-19 lockdowns, trouble collecting unpaid bills and $12 million in extra costs related to hot weather last year pushed the authority into bankruptcy, according to court papers filed in the U.S. Bankruptcy Court in Riverside, Calif. The power authority said Friday its operations have also been hurt by energy generators it has worked with terminating contracts that would have secured electricity during the summer.

Imerys SA is pressing ahead in an effort to get out from under lawsuits over its U.S. mining operation, Imerys Talc America Inc., over the protests of health-care company Johnson & Johnson, WSJ Pro Bankruptcy reported. The Imerys talc-mining business, which supplied talc for Johnson’s Baby Powder, had been hit with lawsuits claiming the product caused cancer. It was placed into chapter 11 protection in 2019 and sold in 2020 for $223 million, with the proceeds earmarked for a trust to pay cancer claims. It is now trying to win court permission to seek creditor approval of its bankruptcy repayment plan. Johnson & Johnson, which has denied liability and is fighting the lawsuits, says Imerys Talc’s bankruptcy is an improper effort to immunize the mining company’s French parent, and make it easier for cancer victims to sue Johnson & Johnson. Imerys Talc is putting sale proceeds, insurance policies and funds from settlements into a trust that will pay claims for cancer. Victims won’t get much from Imerys, court papers say. Under the Imerys Talc plan, some ovarian cancer victims can expect to collect only about 5% of the value that has been assigned to their claim, for example. Johnson & Johnson says the bankruptcy plan allowed cancer victims to set the amount of their damages without opposition, setting a precedent for collecting the rest of the money from Johnson & Johnson.