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Local councils of the Boy Scouts of America have bargained for an extended reprieve from sexual abuse lawsuits in return for a promise to hand over key information to help fill in gaps in victims’ recollections of the harm they suffered, WSJ Pro Bankruptcy reported. Under a pact approved yesterday in the U.S. Bankruptcy Court in Wilmington, Del., lawsuits can be filed against the local councils that hold the bulk of the Boy Scouts wealth, but the litigation won’t progress until mid-July. The trade off is that survivors’ lawyers will receive detailed roster data needed to identify local councils and other organizations that chartered individual troops where the sexual abuse took place. In states like New York, New Jersey and North Carolina, lawmakers have suspended the statutes of limitations for lawsuits over sexual abuse claims that happened long ago, but the clock is ticking down on the window to sue institutions such as the local councils. The Boy Scouts’ national governing body filed for chapter 11 bankruptcy protection last year, automatically stopping sex-abuse lawsuits against it. Hundreds of local councils, which have their own governing boards and own the bulk of the organization’s wealth, didn’t themselves file for chapter 11 and could be targets of legal hostilities, but would be protected by the agreed-upon standstill. In bankruptcy, the youth group is trying to broker a broad settlement of more than 83,000 claims of sexual abuse that includes immunity for the local councils. Read more. 

In related news, the judge overseeing the Boy Scouts of America’s bankruptcy has urged lawyers involved in the chapter 11 case to resolve the remaining roadblocks to the youth organization’s emergence from bankruptcy and compensation of sex abuse survivors as soon as possible, decrying the growing legal fees that the group has incurred. U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware made her comments during a remote hearing on Wednesday in which the Boy Scouts’ lawyers at White & Case reiterated the need for the organization to exit chapter 11 by the end of the summer because funds are running low. Jessica Lauria of White & Case told Silverstein that the Boy Scouts have racked up nearly $100 million in professional fees since the bankruptcy began in February 2020, a figure that will likely reach $150 million by August, Lauria said. Read more. 

The third and last remaining commissioner of the Texas utilities regulator resigned under pressure on Tuesday after the release of comments to investors vowing to protect utility profits and dismissing financial hits from a cold snap on municipal power companies, Reuters reported. The resignation came soon after the disclosure of inflammatory comments by the Public Utility Commission Chair Arthur D’Andrea in a March 9 call with Bank of America utilities’ analysts. The call took place two days before he was to consider rescinding billions of dollars payment to utilities. His stance against repricing helped sink a proposal this week to cut $4.1 billion from charges in the final hours of a deadly February blackout. The regulator and state grid operator raised power prices to about 400 times the normal rate over five days. But they left the pricing in place for 32 hours after the emergency passed, spurring state officials to call for a partial repricing. On the March 9 call, D’Andrea told investors and analysts he had “tipped the scale as hard as I could” to prevent repricing and would keep “the weight of the commission” against it, according to a recording of the call published Tuesday by Texas Monthly magazine.

The judge presiding over Intelsat SA’s bankruptcy case denied stockholders an official voice in how the satellite communications company’s $15 billion in debt is restructured, saying they couldn’t show a “substantial likelihood” that holders of equity stakes are entitled to a recovery, WSJ Pro Bankruptcy reported. Judge Keith L. Phillips of the U.S. Bankruptcy Court in Richmond, Va., declined to order the appointment of an official committee to represent shareholders, cover their legal fees from Intelsat’s coffers and give them more sway over restructuring talks. The judge said that there wasn’t a substantial likelihood that the Intelsat parent company, rather than a subsidiary, has first claim on nearly $5 billion in expected payments from the Federal Communications Commission. The interests of stockholders also are being advanced by other constituencies, including a group of convertible bondholders, making an equity committee unnecessary, the judge added. Only in rare instances do equity shareholders receive a recovery in corporate bankruptcies, usually only when the debt is paid in full and there is cash left over.

A review of Washington state brand inspection records has failed to find discrepancies that would explain how one of the nation’s largest meatpackers could have lost 200,000 cattle through business dealings with a Mesa, Washington-based rancher, the Spokane Spokesman-Review reported. The Washington State Department of Agriculture initiated the audit earlier this year after Tyson Fresh Meats, which operates a packing plant near Pasco, alleged in a lawsuit that Easterday Ranches Inc. defrauded the meatpacker of $225 million by claiming to have purchased and fed for the company about 200,000 cattle that never existed. “Given the two operations are engaged in this legal dispute involving the number of cattle, the program undertook this because it seemed like a prudent step to take to ensure there were no areas of concern or issues with this information we received,” department spokesperson Hector Castro said. The state reviewed brand inspection reports that Easterday Ranches are required to provide monthly that show how many cattle it had in feedlots from January 2019 to January 2021. Inspectors then compared those documents to reports submitted by Tyson reflecting the number of cattle it processed at the meatpacking plant at Wallula. “They didn’t find any discrepancy between the numbers,” Castro said. He said that the department’s review of documents didn’t look at the in-person inspections but focused instead on those monthly paper audits of how many cattle Easterday Ranches reported feeding in its pens. According to court records, Easterday Ranches would bill Tyson for cattle it purchased and then fed to slaughter weight. But late last year, Tyson officials said they became aware of problems. “Its investigation, including the admissions of Defendant’s President Cody Easterday, showed there were over 200,000 head of cattle that Defendant reported to be in inventory, but which did not exist,” Tyson attorney Alan D. Smith wrote in court records. After the lawsuit was filed in state court, Easterday Ranches Inc. and Easterday Farms both filed for chapter 11 bankruptcy protection in early February, alleging that each owed creditors, including Tyson, more than $100 million.

Insurance coverage of sex-abuse claims has emerged as a make-or-break issue in the Boy Scouts of America’s bid to survive its legal trouble, as victims’ attorneys and insurance carriers tangle over how much the youth group’s policies are worth, WSJ Pro Bankruptcy reported. Sex-abuse victims have spurned the Boy Scouts’ opening offer to settle the abuse claims, and insurance companies that sold policies to the youth organization are demanding further investigations into the more than 83,000 claims filed by men who allege they were assaulted as children. The insurers have objected to everything from the Boy Scouts’ choice of law firms to the bona fides of lawyers for victims in a bankruptcy proceeding that began last year. Based on the cash, property, artwork and other hard assets the Boy Scouts have offered to sign over, its settlement proposal would amount to $6,100 for every individual who stepped forward to claim he was a victim of childhood sexual abuse, according to the official committee representing victims. The Boy Scouts said the $6,100 average figure is misleading, as some claims will be worth more than others and, importantly, the number doesn’t include insurance, which would boost the value offered to victims. But victims, who will be asked to vote on the chapter 11 plan, don’t know how much compensation the insurance will yield.

Some state attorneys general and opioid addiction activists pushed back Tuesday against a settlement offer from OxyContin maker Purdue Pharma, saying it didn’t include enough money and goes too far in protecting the company and family members who own it from future liability, the Associated Press reported. A group of nearly half the state attorneys general said it was disappointed in the plan Purdue filed late Monday night in federal bankruptcy court and some said they would seek changes. The lukewarm reaction from them and others raised doubts about how soon the company could emerge from bankruptcy and begin to compensate victims. “We think it’s a step in the right direction, but we’ve got a long way to go,” said Joe Rice, one of the lead lawyers representing local governments that have sued Purdue and other companies over the toll of opioids. The $10 billion plan calls for turning the Connecticut-based pharmaceutical giant into a new company, with its profits going toward efforts to combat the opioid crisis. Members of the Sackler family who own Purdue would contribute about $4.3 billion.

Brilliant Energy LLC filed for bankruptcy in the Southern District of Texas, adding to a growing list of companies that have stumbled after power outages caused by a winter freeze in February, Bloomberg News reported. The electricity provider has estimated liabilities of $50 million to $100 million compared with assets of $10 million to $50 million, according to its chapter 7 filing yesterday. At their peak, the unprecedented outages left four million homes and businesses without heat, light and in some cases water as a rare and powerful winter storm gripped the region, causing as much as $129 billion in economic losses. Dozens of people died in the cold. Brilliant Energy is at least the fourth firm to seek bankruptcy protection in the wake of the Texas freeze, underscoring the crushing financial pressure the outages have put on power companies in the state. The market faces a more-than $3 billion shortfall as more than a dozen companies can’t pay their bills.

Griddy Energy LLC has one final deal for Texans before the power seller shuts down for good: if its 29,000 former customers agree not to sue, the company will cancel electric bills that were about 300 times normal amid last month’s winter storm, Bloomberg News reported. On its first day in bankruptcy court, Griddy lawyers outlined a plan to liquidate, settle with customers and, possibly, arrange lawsuits against those that the company blames for its collapse. U.S. Bankruptcy Judge Marvin Isgur called Griddy’s bankruptcy proposal “unique and really unprecedented.” Isgur, who has overseen some of the biggest corporate restructurings filed in recent years, pushed Griddy to ensure that customers understand how the bankruptcy case will affect their huge electric bills after first criticizing Griddy’s attempt to pay one of its lenders as the case goes forward. Customers face an average bill of about $1,100 because of the winter storm that sent power prices surging, Judge Isgur said. If Griddy wants to cancel those charges in exchange for customers dropping potential lawsuits, the company must clearly let people know that, Judge Isgur said. Griddy filed for bankruptcy on Monday, blaming its woes on the Electric Reliability Council of Texas, which runs the state’s power grid. During the storm, Ercot, as it is known, pushed up wholesale power prices dramatically under rules Texas lawmakers have adopted that deregulated much of the state’s electric industry over the course of several decades. Griddy was barred from the state’s power markets in late February after failing to make a payment.

The family that owns OxyContin maker Purdue Pharma LP agreed to pay roughly $4.28 billion — a larger sum than previously promised — to resolve lawsuits accusing it of helping to fuel the opioid epidemic, the Wall Street Journal reported. The payment from members of the Sackler family is part of a larger restructuring plan filed yesterday in U.S. Bankruptcy Court in White Plains, N.Y., that is intended to get Purdue out of chapter 11. The plan is a critical milestone in the Stamford, Conn.-based drugmaker’s bankruptcy and the culmination of months of negotiation between members of the Sackler family and states, personal-injury plaintiffs and other creditors. A group of around half of all U.S. states has repeatedly demanded more money from the Sackler family, a concession included in Monday’s plan. At the time of its September 2019 bankruptcy filing, the family had agreed to pay $3 billion with the promise of up to another $1.5 billion contingent on the sale of its international business. The new offer guarantees $4.28 billion, paid in installments over the next decade. A key piece of the restructuring plan, which includes another $1.5 billion in cash and expected proceeds from OxyContin sales, is ensuring that the money will largely be spent to help abate the nation’s opioid crisis, rather than going into the general coffers of state and local government creditors. Purdue’s chapter 11 plan must be approved by a bankruptcy judge and likely will be challenged in court by individuals who have suffered injuries from opioids and state attorneys general who have not signed onto the deal. A final resolution isn’t expected before the summer. “We’re going to keep fighting for the accountability that families all across this country deserve,” said Massachusetts Attorney General Maura Healey, who, along with 23 other attorneys general, voiced opposition to the plan yesterday and called for greater transparency and more money upfront from the Sacklers.