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The New York attorney general called for the dismissal of the National Rifle Association’s bankruptcy, alleging it was filed to escape state oversight, Bloomberg News reported. The case is improper because the NRA has openly stated that the gun rights organization is “in its strongest financial condition in years,” New York said in a filing on Friday in bankruptcy court in Texas. The chapter 11 was also brought in bad faith to avoid New York’s lawsuit seeking to dissolve it, the state said. The NRA is “essentially fleeing or seeking an end run around a pending regulatory enforcement action in New York,” the state said in the filing. The lawsuit filed last year by New York Attorney General Letitia James alleges the NRA diverted charitable donations for years to enrich the organization’s top executives in violation of laws governing nonprofits. The state in its filings also took aim at NRA Executive Vice President Wayne LaPierre, who it claims fleeced the gun rights organization. LaPierre has disputed New York’s allegations. LaPierre, who was among the signers of the group’s bankruptcy petition, “is accused of looting the NRA, yet he has made the determination and signed the petitions in an effort to use the bankruptcy court to remove the NRA from regulatory oversight,” the state said in its filings.

The law firms defending Purdue Pharma LP in probes into its OxyContin painkiller didn’t disclose an existing deal with Purdue’s owners to keep information shared between them confidential when the drugmaker filed for bankruptcy, the Wall Street Journal reported. Skadden, Arps, Slate, Meagher & Flom LLP and WilmerHale received court permission in November 2019 to continue working for Purdue after it sought chapter 11 protection. But the firms’ nondisclosure of the agreement with the members of the Sackler family who own Purdue, and whose interests are at odds with company creditors, skirted bankruptcy rules meant to reveal potential conflicts of interest, bankruptcy experts said. Earlier this week, Michael Quinn, a lawyer representing five people with wrongful death and personal injury claims against Purdue, questioned whether the 2018 defense agreement restricted what Skadden and WilmerHale could disclose to creditors as they have probed whether they can recover billions of dollars from the drugmaker’s owners. Even though the law firms have represented Purdue for years, they have additional obligations to company creditors while the company is in chapter 11. A separate committee of Purdue creditors has been probing the transfer of billions of dollars from Purdue to the Sacklers before the company filed bankruptcy, according to court documents. The committee is examining if these roughly $10 billion in transfers to the Sacklers can be recovered for the benefit of Purdue creditors, court papers say. Mr. Quinn said in his letter he is concerned that the obligation in the defense agreement to keep Sackler information confidential conflicted with Skadden’s and WilmerHale’s duties in bankruptcy to Purdue and its creditors. The Sacklers have consistently denied throughout the bankruptcy case that the transfers were improper and said more than half the money was used to pay taxes or invested in international ventures. However, they offered to cede control of Purdue and pay a $3 billion cash settlement to resolve creditor claims against them.

New York-based Roman Catholic dioceses that filed for chapter 11 protection to address child sex abuse lawsuits are fueling tensions by asking bankruptcy courts for a victims’ claim filing window that’s shorter than what survivors were given under a recently enacted state law, Bloomberg Law reported. New York’s Child Victims Act, signed into law by Gov. Andrew Cuomo (D) in 2019, has spurred a flood of abuse lawsuits against the church and other organizations. Victims have filed more than 4,800 lawsuits against alleged abusers and institutions that harbored or concealed them, state court records show. Four of New York’s eight local dioceses — Syracuse, Rochester, Buffalo, and Long Island’s Rockville Centre — have filed chapter 11, allowing them to ease the burden of litigation by consolidating victims’ lawsuits against them and negotiating with claimants as a single class. Dealing with shortened deadlines could cause stress for victims and suppress their legal rights in emotionally charged, controversial cases, victims’ proponents say. The New York law allows child sex abuse victims to sue at any time before they turn 55 and creates a temporary window — until Aug. 14, 2021 — to file claims that previously were blocked by the statute of limitations. The Bankruptcy Code, on the other hand, allows debtors to give as little as 21 days’ notice of an upcoming deadline to submit claims in a bankruptcy proceeding. None of the dioceses in chapter 11 have argued for that bare minimum. But they all say the bankruptcy court shouldn’t align the notice period with the CVA’s expansive time frame. Bankruptcy judges have recognized the unique nature of sex abuse-related cases. “This case is not like a typical commercial filing, in which the debtor can readily identify from its books and ledgers all of the actual and disputed trade creditors,” Judge Carl L. Bucki of the U.S. Bankruptcy Court for the Western District of New York observed in a September opinion in the Buffalo diocese’s case. By reopening the statute of limitations, New York “expressed a policy decision that deserves the respect of this court,” he said.

Chicago’s Mercy Hospital and Medical Center, the oldest chartered hospital in the city, has had financial problems since the 1990s, culminating in a bankruptcy filing Wednesday, Bloomberg News reported. Its story is emblematic of the challenges facing its patients and a large swathe of U.S. hospitals also struggling to survive. Mercy, a fixture on Chicago’s South Side, takes on sicker people than some of its competitors, and many of its patients lack private insurance that reimburses at higher rates. It’s also suffered as more treatment moves outside hospitals. Mercy sought court protection after Illinois health officials rejected a plan to close the hospital and replace it with an outpatient center. Even before the pandemic slammed hospitals, forcing them to pay up for protective equipment and cancel many profitable elective procedures, the divide between centers like Mercy and richer facilities was widening. “Hospitals in surrounding areas have made investments in outpatient services, which, along with new and updated facilities, allowed them to dominate positive consumer opinions in the market and siphon off commercial patients, Medicare patients and outpatients,” Chief Executive Officer Carol Garikes Schneider, who’s run the hospital since 2013, said in a court filing on Thursday. Felicia Gerber Perlman, who co-heads the bankruptcy and restructuring group at law firm McDermott Will & Emery in Chicago and isn’t involved in the case, said Mercy’s bankruptcy could herald a wave of similar filings among providers in lower-income, urban areas. Those hospitals share some challenges with rural facilities that have seen revenues and patient bases shrink. Mercy’s patients suffer “disproportionately” from chronic diseases that would benefit from early detection and monitoring in an outpatient setting, Schneider said in the filing that detailed years-long efforts to save the institution.

The Diocese of Winona-Rochester in Minnesota says it has reached a $21.5 million settlement with 145 individuals who were sexually abused by its clergy members, ABC News reported. It is the last Catholic diocese in the state to settle its abuse claims, filed in response to a 2013 law that temporarily extended the statute of limitations on abuse cases. The diocese was one of five in Minnesota that had filed for chapter 11 protection in response to abuse claims against its priests. The settlement, announced on Wednesday, allows the diocese to submit a financial reorganization plan to the U.S. Bankruptcy Court for final approval. The dioceses of St. Cloud, New Ulm and Duluth and the Archdiocese of St. Paul and Minneapolis have emerged from bankruptcy.

The National Rifle Association’s former advertising agency requested that the gun group’s bankruptcy case be tossed out, saying it was filed in bad faith, WSJ Pro Bankruptcy reported. Ackerman McQueen Inc., which spearheaded the NRA’s ad campaigns for decades before getting caught up in a battle for control of the organization, is now the biggest unsecured creditor in the chapter 11 proceedings. Ackerman filed papers yesterday in the U.S. Bankruptcy Court in Dallas asking that the bankruptcy case be dismissed on the grounds that it amounts to an improper effort to gain a litigation advantage over the New York state authorities that have sued to break up the NRA. “It’s a disappointing, but predictable, response from a terminated vendor and defendant in litigation involving significant claims of wrongdoing,” said Michael J. Collins, partner at Brewer, Attorneys & Counselors. “Ackerman McQueen continues to attack the NRA and its advisors to deflect from the allegations against the agency. We will continue to operate within the parameters of the bankruptcy court — to the benefit of the NRA, its members, and its vendors.” The filing comes on the heels of a motion by a member of the NRA’s board, Phillip Journey, who asked for the appointment of an examiner “to bring to light the veracity of the alleged fraud, dishonesty, incompetence, and gross mismanagement that has plagued the NRA’s reputation.” At a court hearing yesterday, Judge Harlin Hale said that he had decided not to read any news accounts of the NRA’s high-profile bankruptcy, which is still in the early stages. Journey’s motion said last month’s bankruptcy filing was a surprise to one or more directors on the NRA board. In a statement, NRA lawyer William A. Brewer said Journey was mistaken in suggesting the bankruptcy filing was the product of a flawed process. Ackerman’s critique argues the NRA is improperly using bankruptcy to escape a raft of litigation that the NRA itself initiated, as well as official enforcement proceedings that threaten to expose financial wrongdoing, including by New York Attorney General Letitia James.

Marriott International Inc. was denied its request to move the chapter 11 case of a Washington, D.C., hotel to the nation’s capital, with a bankruptcy judge saying the property’s venue choice should carry significant weight and that in this case a transfer was unnecessary, WSJ Pro Bankruptcy reported. Marriott Wardman Park, which the hotel chain had managed, sought protection from creditors in January in the U.S. Bankruptcy Court in Wilmington, Del. The 1,152-room property’s secured lender and sole owner is Pacific Life Insurance Co. One of Marriott’s arguments was that other bankruptcy cases involving a single real estate property have been moved near to their location. Bankruptcy Judge John Dorsey said yesterday that those cases involved real estate businesses with significant day-to-day operations and many employees.

Tyson Foods Inc.’s beef-producing unit has asked a judge to appoint a bankruptcy trustee to run Easterday Ranches Inc., which filed for chapter 11 protection after the food company sued it for alleged fraud, WSJ Pro Bankruptcy reported. Tyson said restructuring professionals who recently took over Pasco, Wash.-based Easterday allowed a significant land sale to go through just before its Feb. 1 bankruptcy filing. Much of the money from the $16 million sale of the feed lot went to pay professionals and insiders of the family-run operation who had steered the business into trouble, according to Tyson, Easterday’s sole customer. Tyson said that it is out roughly $200 million it funded Easterday to feed cattle that didn’t exist, adding it was forced to come up with more money last week to keep 54,000 cattle actually on Easterday’s ranch from starving. The push for a bankruptcy trustee from one of the country’s largest meat producers takes aim at alleged actions involving restructuring adviser Paladin Management Group, a consulting firm that works with distressed businesses. Paladin failed to prevent the land sale, according to Tyson’s motion calling for a trustee, which was filed Monday in U.S. Bankruptcy Court for Spokane and Yakima, Wash. A spokeswoman for Paladin said Easterday will respond to the motion at the appropriate time, adding the company doesn’t believe the appointment of a trustee is in the best interests of the estates.