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Texas’s largest and oldest electric power cooperative on Monday filed for bankruptcy protection in federal court in Houston, citing a disputed $1.8 billion bill from the state’s grid operator, Reuters reported. Brazos Electric Power Cooperative Inc is one of dozens of electricity providers facing enormous charges stemming from a severe cold snap last month. The fallout threatens utilities and power marketers who collectively face billions of dollars in blackout-related charges, executives said. Unusually frigid temperatures knocked out nearly half of the state’s power plants in mid-February, leaving 4.3 million people without heat or light for days and bursting water pipes that damaged homes and businesses. Brazos and others that committed to provide power to the grid and could not, were required to buy replacement power at high rates and cover other firms’ unpaid fees. The state’s grid operator, Electric Reliability Council of Texas (ERCOT), on Friday said $2.1 billion in initial bills went unpaid, underscoring the financial stress on utilities and power marketers. More providers likely will reject the bills in coming days, executives said. “The municipal power sector is in a real crisis,” said Maulin Patani, a founder of Volt Electricity Provider LP, an independent power marketer that is not a member of the Brazos coop. ERCOT should suspend the service charges to halt further defaults, he said in an interview on Sunday. The city of Denton, in north Texas, last week sued ERCOT in a state court to prevent it from charging it for fees unpaid by other users of the grid. Denton Electric could face tens of millions of dollars for fees that were not collected from others, the suit claimed.

The judge overseeing the bankruptcy case filed against Navient Corp.’s student-loan servicing arm dismissed the involuntary petition, saying there was no evidence the student-loan giant isn’t paying its debts, WSJ Pro Bankruptcy reported. Three individuals who allege that Navient improperly collected on their student debt even after they discharged it through their own personal bankruptcies had filed an involuntary chapter 11 petition against Navient Solutions LLC earlier this month. Judge Martin Glenn of the U.S. Bankruptcy Court in New York ruled yesterday that since the debts are part of the individuals’ claims that are still being disputed, with some subject to ongoing litigation, the borrowers had no basis to assert that Navient had failed to refund the alleged overpayments. “The proper place for that litigation to proceed is in the courts grappling with those issues, and not by jumping the queue with this involuntary petition,” Judge Glenn said.

A dispute between the Boy Scouts of America and childhood sex-abuse victims has put a cease-fire agreement at risk with the youth organization’s survival strategy on the line, WSJ Pro Bankruptcy reported. The Boy Scouts are asking a bankruptcy judge to force an extended standstill in legal hostilities by sex-abuse victims against the local councils that control the bulk of the group’s billions of dollars in wealth. The chances of a reorganization for the Boy Scouts hang in the balance, lawyers for the organization said in a court filing on Monday. The official committee that represents sex-abuse victims will fight the effort to force a legal peace, said James Stang, lead lawyer for the committee. “We intend to aggressively oppose the motion to extend the preliminary injunction,” Stang said. “We have significant questions, underlying factual questions that haven’t been answered.” The brewing trouble highlights a vulnerability in the Boy Scouts’ strategy of resolving tens of thousands of sex-abuse claims. Only at the national level does the organization enjoy chapter 11 protection from lawsuits accusing it of failing to protect children from sexual predators. More than 250 local councils aren’t in bankruptcy, meaning the estimated $3 billion of the wealth they control isn’t shielded by the automatic stay of chapter 11, which protects against collection efforts after a bankruptcy filing. New York, New Jersey, California and other states in recent years changed their statute-of-limitations laws to allow for individual lawsuits over childhood sexual abuse even if the alleged injuries happened decades ago. In February 2020, the prospect of an onslaught of litigation propelled the Boy Scouts into bankruptcy, where it faces a reckoning with an estimated 85,000 people who have made compensation claims for suffering sexual abuse.

Chemours Co.’s directors were accused in a lawsuit of duping shareholders about its financial health and the extent of its legal liability at the time it was spun off from a predecessor of DuPont de Nemours Inc., Bloomberg News reported. When the former E.I. DuPont & Co. officials spun Chemours off in 2015, they saddled the ex-unit with more than $2.5 billion liability over environmental harm and health risks from a class of chemicals known as PFAS, an amount that left the firm insolvent at its inception, Robert Pinto, a Chemours investor, said in a Delaware Chancery Court suit unsealed Thursday. Chemours directors covered up the company’s financial woes over a four-year period by approving dividends and making stock repurchases as part of an effort to persuade the market that the firm reshaped itself into a viable entity, Pinto said. The directors didn’t acknowledge until May 2019 the company hadn’t “transformed itself from being on the brink of insolvency,” and its liabilities were crushing, according to the 111-page complaint. “Any stockholder with candid reporting from the board would have rushed to sell his or her shares rather than continue sitting on a financial time bomb.”

The National Rifle Association filed a countersuit against New York Attorney General Letitia James, saying that she lacks authority to invoke state laws governing nonprofits in her zeal to destroy the gun rights group, Reuters reported. In a Tuesday night court filing, the NRA, which filed for bankruptcy last month, accused James of “weaponizing” her powers to pursuing a “blatant and malicious retaliation campaign” against it because she dislikes what it stands for. James’ office did not immediately respond on Wednesday to requests for comment. The attorney general had sued the NRA and Chief Executive Wayne LaPierre last August, saying the nonprofit diverted millions of dollars to fund luxurious trips for officials, no-show contracts for associates, and other questionable expenses.

The U.S. Department of Interior, Eagle Specialty Materials (ESM), and the attorneys in Blackjewel’s bankruptcy case on Feb. 19 released a settlement agreement for unpaid royalties on federal coal leases mined by Blackjewel, and its predecessor, Contura, at the Eagle Butte and Belle Ayr mines in Wyoming’s Powder River Basin, according to a commentary in the Wyoming Business Report. According to the legal filing, more than $32 million in royalties are unpaid at the Belle Ayr Mine and $27.8 million in royalties are unpaid at the Eagle Butte Mine, with hundreds of thousands owed in interest. Powder River Basin Resource Council decries the deal struck between the Department of the Interior and ESM, a company that was paid over $80 million to take over the Belle Ayr and Eagle Butte coal mines from Contura during the Blackjewel bankruptcy proceeding in October 2019. The settlement of approximately $61.5 million debt of unpaid royalties and interest for a few cents on the dollar and insecure interest-free future payments and royalties has cost Wyoming and American citizens tens of millions of dollars. Wyoming receives approximately half of all federal coal royalties, so loses half of these unpaid royalties. “This terribly one-sided settlement allows Belle Ayr and Eagle Butte to keep operating for now,” said Bob LeResche, a Resource Council Board member, “but it forgives tens of millions of dollars in royalties that should have been supporting Wyoming schools and other federal projects.” The settlement — made to allow Interior to transfer the coal leases from Blackjewel to ESM — collects only a small portion of the unpaid royalties. Additionally, ESM is already in lengthy payment plans for back taxes owed to the state and Campbell County. Meanwhile, the mines have been reducing production and suffer the same economic challenges other Powder River Basin coal mines are facing. Coal plant closures across the nation are reducing production, which puts any future payments at greater and greater risk.

Steak ’n Shake Inc. sued lender Fortress Investment Group LLC after the burger chain paid off debt coming due to avoid bankruptcy, accusing Fortress of misusing confidential information to mount a takeover bid, WSJ Pro Bankruptcy reported. The Indiana-based milkshake-and-burger chain, backed by entrepreneur Sardar Biglari, said that Fortress obtained sensitive information through negotiations for a potential real estate deal with Steak ’n Shake, then used that knowledge to build an $89 million position in the company’s loans. After acquiring the loans, Fortress made clear it “would not accept a negotiated repayment” and said it “would either force the company to repay the loans in full or file for bankruptcy,” according to the complaint. Steak ’n Shake paid off the loans in full on Friday, spending nearly $103 million to retire the debts and avoid a bankruptcy filing, the company said. Steak ’n Shake’s lawsuit, filed Friday in Marion County Superior Court in Indiana, seeks to recoup alleged losses from Fortress’s actions. Fortress didn’t immediately respond to a request for comment.

The U.S. Department of Justice’s bankruptcy watchdog is opposing a request to add more trade creditors to a committee in the National Rifle Association’s chapter 11 case, saying the organization has said it expects to pay its creditors in full, Reuters reported. U.S. Trustee William Neary said in an objection filed on Sunday in the U.S. Bankruptcy Court for the Northern District of Texas that the unsecured creditors’ committee it appointed earlier in the NRA’s chapter 11 case adequately represents all types of unsecured creditors. Neary urged U.S. Bankruptcy Judge Harlin Hale to reject the motion from creditor Membership Marketing Partners LLC, which was filed last week.

Navient Solutions, the student loan servicing arm of Navient Corp, is asking a New York bankruptcy judge to throw out an involuntary chapter 11 petition brought by three student loan borrowers, saying the case is frivolous, Reuters reported. Navient, represented by Kirkland & Ellis, filed its motion to dismiss the case on Wednesday, a week after the three borrowers filed their petition in the U.S. Bankruptcy Court for the Southern District of New York. The borrowers, represented by Smith Law Group, say they are owed a combined $45,683.64 in "overpayments" they say Navient illegally collected. "Nothing about the filing is based on reality, facts, or evidence," Navient said in the filing. Austin Smith, representing the borrowers, rejected Navient's characterization of the petition. A hearing on the motion to dismiss is set for Feb. 25 before U.S. Bankruptcy Judge Martin Glenn. Navient said in Wednesday's filing that the borrowers are would-be class members in pending litigation surrounding student loan debts in other courts and that their lawyer, Smith, is using the involuntary petition as an attempt to gain leverage. The company called the involuntary filing "the latest salvo in Counsel's long-running, highly public crusade against Navient and the broader student loan servicing industry." The borrowers say Navient is insolvent, citing $87.4 billion in assets and $85 billion in liabilities, plus $4 billion the Consumer Financial Protection Bureau is seeking in damages in a 2017 lawsuit accusing the company of interest rate manipulations. They also note in the petition that the federal government says Navient owes it $22 million in overcharges over the course of a decade. But Navient says that the debts the petition references are contingent and disputed. In its motion to dismiss, the company touted its financials, saying that by the end of 2020 it had a cash balance of $1.2 billion and had eliminated $1.1 billion in senior unsecured debt.