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The Supreme Court today will delve into the intricacies of bankruptcy law when it hears oral arguments about the controversial deal regarding Purdue Pharma, the former manufacturer of prescription painkiller OxyContin, The Hill reported. The company filed for bankruptcy in 2019 as it faced thousands of lawsuits in connection with the opioid crisis, as it was accused of downplaying the risks of Oxycontin and illegally marketing the drug. Under the bankruptcy reorganization plan, members of the wealthy Sackler family, who controlled Purdue Pharma, would contribute up to $6 billion to the settlement in exchange for being released from civil liability. But the Sacklers involved in the company did not personally file for bankruptcy themselves. They divested themselves of ownership of the company, and Purdue reorganized into a public-benefit company, with profits going to fighting the opioid crisis. The $6 billion would be contributed over the course of a decade, and the family admitted no wrongdoing. Under the so-called “third party release,” neither the Sacklers nor their associates could ever be sued in relation to Purdue and Oxycontin. The liability release has been a major sticking point, though about 95 percent of creditors — which include personal injury victims, states and various governmental entities, among others — voted to approve the plan, court filings show. The settlement was approved by a bankruptcy judge, but the U.S. Trustee Program, a component of the Justice Department that serves as a watchdog in bankruptcy cases, objected. The possibility that none of the Sackler family members involved in the company could face any liability for the opioid crisis has generated public outrage. The Justice Department argued that the bankruptcy court did not have the authority to release the Sackler family members from the claim. In August, the Supreme Court paused the bankruptcy settlement on an emergency basis as the justices agreed to take up the case in full. Read more.

To listen to the live oral argument today starting at 10 a.m. ET, please click here.

Norway's $1.5 trillion sovereign wealth fund, the world's largest, said on Friday it has been appointed by a U.S. court to co-lead an ongoing U.S. securities class action relating to the now-bankrupt Silicon Valley Bank (SVB), Reuters reported. SVB's collapse in March was the trigger for the worst banking shock since the 2008 global financial crisis, sending bank stocks globally on a wild ride. The Norwegian fund said the SVB case raised significant concerns regarding the integrity of the public markets, the governance of large financial institutions and the interests of the investor community more broadly. "We manage money on behalf of all Norwegians. I see it as our duty to take legal action to both maximise our recoveries after the SVB collapse and to signal that this is not acceptable market behaviour," the fund's Chief Executive Nicolai Tangen said in a statement. The fund, which invests Norway's surplus oil and gas revenue abroad, is the world's biggest single stock market investor, owning some 1.5% of all globally listed shares with stakes in more than 9,200 companies. It held a 1% stake in SVB at the end of 2022, valued at $137.9 million, according to data on the fund's website. The other co-lead plaintiff in the class action is Swedish pension fund Sjunde AP-fonden (AP7), the Norwegian fund said.

Chinese property giant Evergrande and its biggest foreign creditors are negotiating an 11th-hour deal to prevent a liquidation of the company’s offshore businesses on Monday, WSJ Pro Bankruptcy reported. Evergrande and a group of its bondholders have been negotiating to restructure the financially troubled company after Chinese regulators vetoed a previous version of their plan. In a recent proposal, Evergrande has offered to give control of around 20% of its Guangdong-based parent company, China Evergrande Group, to its creditors. To comply with Chinese regulators’ demands, Evergrande wouldn’t issue new debt as part of the restructuring. Additionally, Evergrande is in discussions with NWTN, a Dubai-based electric-vehicle company, to invest new money in Evergrande’s EV unit, the people said. NWTN had agreed to invest $500 million for a 28% stake in Evergrande Auto, which would have helped Evergrande Auto’s expansion, but NWTN temporarily suspended its commitment to invest the funds when Evergrande’s earlier restructuring plan fell apart, according to securities filings.

Michigan Attorney General Dana Nessel’s office has asked a federal judge to reject an attempt by former Edenville Dam owner Lee Mueller to shield himself from a nearly $120 million judgment through bankruptcy protection, MLive.com reported. On Nov. 16, Nessel’s office motioned for dismissal of Mueller’s chapter 13 case in U.S. Bankruptcy Court in Nevada, calling the former dam owner’s filing a “bad faith” effort to avoid paying judgments following the 2020 Michigan flooding disaster. Mueller, of Las Vegas, was ordered to pay $119,825,000 in natural resource damages by a federal judge in Michigan, who issued a default judgment against the former Boyce Hydro owner on Nov. 27 after ruling in February he was personally liable for the death of fish and freshwater mussels during the flood. In the state’s motion in Nevada, assistant attorney general Nathan Gambill called Mueller “one of the worst environmental wrongdoers in Michigan history.” “His bankruptcy filings do not reflect it, but Mr. Mueller’s sole purpose in pursuing bankruptcy relief is to discharge court judgments,” Gambill wrote. A spokesperson for Nessel’s office said Michigan seeks to collect on the Nov. 27 judgment “to the fullest extent permitted by law” and use the money for “restorative purposes.”

The Supreme Court on Monday will consider the Biden administration’s bid to scuttle a $6 billion accord between bankrupt drugmaker Purdue Pharma LP and its billionaire owners, Bloomberg News reported. The deal would protect members of the Sackler family from future opioid lawsuits by way of an oft-used legal mechanism that the high court is now scrutinizing for the first time. If upheld, the settlement would snuff out an inferno of civil lawsuits blaming Purdue’s owners for the company’s aggressive marketing of OxyContin and, in exchange, route billions of dollars to victims, states and communities harmed by the nation’s addiction crisis. The proposal won overwhelming support from opioid crisis victims who voted on it, but there remains a vocal contingent bitterly opposed to letting Purdue’s billionaire owners put the lawsuits behind them. Detractors may get their way because of the challenge from a unit of the Justice Department. At issue is a component of the settlement that forces all opioid victims to give up their claims against the Sacklers even if they’d prefer to take their chances with a jury. Congress authorized similar maneuvers decades ago in bankruptcies related to asbestos lawsuits, and over time, lawyers and bankruptcy courts reasoned that the mandate could be expanded to an array of corporate wrongdoing. Similar deals have ended mass litigation over dangerous products and waves of sex abuse claims against Catholic dioceses, the Boy Scouts of America and USA Gymnastics. They even appear in some mundane acquisitions of bankrupt firms. But federal appeals courts are split over whether the linchpin of these agreements — provisions called nonconsensual third-party releases — are lawful.

Crypto lender Celsius Network may have to seek a new creditor vote on its proposed transformation into a bitcoin-mining business, a U.S. bankruptcy judge said during a court hearing on Thursday, Reuters reported. Celsius said last week that it had reduced its post-bankruptcy business plans to focus only on bitcoin-mining, citing the skepticism of the U.S. Securities and Exchange Commission (SEC) about its other planned business lines. Bankruptcy Judge Martin Glenn of New York, who is overseeing Celsius' chapter 11 process, expressed frustration on Thursday about the late pivot, saying that he had been a "broken record" about Celsius's need to reach agreement with the SEC. "This is not the deal that the creditors voted on," Glenn said. The revised deal could face "substantial opposition" from creditors, he said. The SEC did not definitively object to Celsius' bankruptcy plan before it was approved, but Celsius said the agency was unwilling to approve crypto lending and staking activity that the agency has opposed in the past.

FTX Trading Ltd. won bankruptcy court approval to begin selling its stakes in digital trusts managed by crypto firm Grayscale Investments in order to raise money to repay creditors owed billions of dollars, Bloomberg News reported. FTX plans to sell the assets in a way that maximizes the value and avoids disrupting the market for the digital investments, according to court documents. Grayscale sold investments linked to various digital currencies. The buyers didn’t hold the actual currencies, but instead got shares in trusts that Grayscale put together and managed. FTX’s stakes in the trusts were worth about $744 million as of last month, the company said in court papers. Since FTX filed for bankruptcy last year amid fraud allegations, the company’s advisers have been tracking down assets and trying to untangle a complex web of debts owed to various creditors, including customers who put cash and crypto on the trading platform. FTX’s administrators have so far recovered about $7 billion in assets, including $3.4 billion of crypto, according to court documents.

A prominent Pacific Northwest lobbying and public affairs firm has filed for chapter 11 protection amid a bitter legal dispute between estranged co-owners, the Seattle Times reported. Seattle-based Strategies 360 filed a petition on Monday in the U.S. Bankruptcy Court for the Western District of Washington in an effort to stave off what CEO Ron Dotzauer described in court filings as a hostile and humiliating takeover bid by his former business partner, Eric Sorenson. A legal fight between the two men has been brewing for years over Dotzauer’s failure to pay Sorenson $6 million as part of an agreement to buy out his former 49% ownership stake in the firm, court records show.

The bankruptcy estate of Bed Bath & Beyond has filed the largest-ever lawsuit with the Federal Maritime Commission, seeking around $300 million from Mediterranean Shipping Co. for allegedly overcharging to move its cargo during the pandemic, the Wall Street Journal reported. The bankrupt retailer wants Geneva-based MSC, the world’s largest boxship operator in terms of capacity, to pay around $150 million for damages and an equal sum for what it described as exploitative and coercive behavior. Complaints by American companies are handled by the FMC, the U.S. maritime regulator. Bed Bath & Beyond filed for bankruptcy protection in April, after years of losses. It subsequently closed all of its stores and sold its brand to Overstock.com, which has taken on the Bed Bath & Beyond name. The bankrupt estate changed its legal name to DK Butterfly. The 36-page lawsuit said MSC’s performance in 2021 was “abysmal” and details how the retailer had to pay high freight rates in the spot market to get its goods shipped. It also claims that MSC failed to meet its contractual obligations in terms of pricing along with saddling the retailer with surcharges.