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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, the Wall Street Journal 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.

A judge overseeing the bankruptcy of offshore driller Valaris yesterday rejected lender efforts to submit an alternative restructuring proposal ahead of a hearing to approve the company's current plan in February, Reuters reported. U.S. Bankruptcy Judge Marvin Isgur in Houston issued his ruling after the company, represented by Kirkland & Ellis, requested a 120-day extension of its exclusive period to file a plan, which prevents creditors from submitting their own, competing proposals. Valaris also said that if its exclusivity period was not extended, it could default on its bankruptcy financing and restructuring agreement with the company's noteholders, which it said would cause irreparable harm. The COVID-19 pandemic's effect on the oil market paired with an oil rig accident caused Valaris to file for bankruptcy in August with almost $8 billion in debt. The company hopes to reorganize and convert some of its debt into equity. Valaris plans to convert $581 million owed to Citibank into 32.5% equity in the company post-reorganization. Noteholders, who are owed $6.5 billion, would receive 34.8% equity and the option to participate in a rights offering for more than half of $500 million in new secured debt. If the noteholders purchase the new debt, they would also receive another 30% of the reorganized equity, plus fees.

About six months after opening its first store, Art Van successor Loves Furniture is filing for chapter 11 restructuring and liquidating 25 stores in hopes of surviving, WOODTV.com reported. In court documents filed Sunday, Loves interim CEO Mack Peters said Penske Logistics Services, the company’s warehouse manager, pulled its people and trucks from Loves’ warehouse in late January after the furniture retailer ran out of cash to pay Penske. Loves says Penske also refused to let Loves use its warehouse management system to find inventory in the 1-million-square-foot warehouse to fulfill customer orders. Penske took a step further on Jan. 6 by filing for a temporary restraining order against Loves to prevent the furniture retailer from moving or delivering items in its warehouse, according to the bankruptcy court filing. Loves says it canceled all customer orders that weren’t already pulled from the warehouse that the company leased directly.

The official committee of sex-abuse victims has challenged the Boy Scouts of America over claims that Philmont Scout Ranch in New Mexico and other valuable assets on the organization’s balance sheet can’t be used to pay settlements to trauma survivors, WSJ Pro Bankruptcy reported. In court papers Friday, lawyers representing those men said that the Boy Scouts are wrongly holding back $667 million in cash, investments and properties from a court-supervised bankruptcy process. The Philmont ranch is the Boy Scouts’ most prized high-adventure camp: 140,000 acres in the Rocky Mountains, the site of revenue-producing activities that have drawn more than one million young men over decades. The Boy Scouts also have said a high-adventure base in Florida and another straddling Minnesota and Canada are unavailable to cover the organization’s liabilities, according to Friday’s court filing. The committee said that nothing in the deeds of the properties would prevent them from being sold to pay creditors, chiefly the men who suffered sexual misconduct at the hands of Boy Scouts volunteers. In a statement, the Boy Scouts said that the adventure camps and other assets it says are out of reach to creditors “are critical to delivering the mission of Scouting.” The committee is asking for a court ruling on how much Boy Scouts land, cash and investments can be held out of reach of creditors as negotiations continue in the largest-ever bankruptcy case driven by claims of sexual abuse.

Lawyers and survivors of childhood sexual abuse are reviewing more than 25,000 pages of internal Buffalo (N.Y.) Diocese documents relating to clergy abuse, diocesan finances and personnel files, the Buffalo News reported. Diocese lawyers began handing over the files in December under the terms of an agreement that they hashed out with abuse survivors who make up the committee of unsecured creditors in the diocese’s chapter 11 bankruptcy reorganization, according to multiple sources. Whether the general public will be able to examine the confidential records someday remains unclear and likely will be subject to intense negotiations during the bankruptcy proceedings. In exchange for the records, the creditors committee agreed not to press forward with sex abuse lawsuits against individual parishes and other Catholic entities. The committee also agreed to keep confidential the contents of the diocese documents — at least for now.

The Federal Energy Regulatory Commission (FERC) is appealing a judge’s confirmation of Extraction Oil & Gas’s bankruptcy reorganization plan, but the company says that shouldn’t slow its exit from chapter 11 protection, Denver Business Journal reported. FERC, the agency that regulates interstate pipelines and their rates, filed a notice on Wednesday with the U.S. Bankruptcy Court for the District of Delaware that it is appealing a Dec. 23 ruling by Chief Judge Christopher Sontchi that approved the Denver oil company’s reorganization plan, which is anchored by a debt-for-equity exchange. The agency got involved in the bankruptcy case after Extraction sought, and ultimately won, court backing to break its existing pipeline and midstream contracts covering the transport of crude from Extraction wells in the Denver-Julesburg Basin north and east of the Denver metro area. Extraction Oil & Gas filed for chapter 11 protection on June 14 to reorganize and free itself from $1.7 billion in debt it couldn’t pay, either by negotiating a debt-for-equity swap with lenders, or by merging or being acquired by another oil and gas company. The reorganization plan calls for the company to issue new stock for a $200 million equity rights offering allowing major debtholders and lenders to convert what they’re owed into new shares in a reorganized Extraction. Another $50 million in equity rights will be offered to some creditors holding unsecured general claims against Extraction. That appears to include some pipeline and midstream companies that have renegotiated terms with Extraction in recent weeks. FERC had, in early December, argued to the bankruptcy court that an injunction covering the rejection of Extraction’s previous pipeline contracts was too broad and could be construed to limit FERC’s ability to weigh in on surviving FERC-regulated contract issues.

Junior creditors of auto parts maker Garrett Motion are opposing equity holders' request that the company cover certain legal fees of two potential investors, saying the money would likely come out of the creditors' own payouts, Reuters reported. In court papers filed on Wednesday, Garrett Motion's unsecured creditors' committee, represented by White & Case, urged U.S. Bankruptcy Judge Michael Wiles in Manhattan to reject the equity group's request. Garrett Motion, represented by Sullivan & Cromwell, filed for bankruptcy in September amid legal disputes over $1.3 billion in asbestos liabilities with its former parent, Honeywell International, and $1.9 billion in funded debt. The company has lined up a $2.6 billion bid from KPS Capital to acquire its assets. The KPS bid is subject to better offers, however, and an auction process remains ongoing. Garrett Motion previously stalled an effort by Centerbridge Partners and Oaktree Capital Management to submit their own restructuring proposal, which included a rights offering of preferred stock, instead of a sale. Wiles ruled in November that it was too early in the case for a competing proposal but that he would not bar consideration of such offers down the road. But with the outcome of the auction still unknown, the company could opt for an alternative restructuring strategy. The official committee of equity holders, represented by Kasowitz Benson Torres, says it has two potential investors. The unnamed investors are interested in exploring a plan that would include the issuance of new debt and preferred stock, allow current shareholders to retain their interests in Garrett Motion and refinance the company's existing debt, according to the motion. But, the equity group says, the two potential investors won't move forward with a binding commitment letter unless the company agrees to reimburse them for up to $2.5 million in legal fees and expenses.

The Allegheny County Health Department case against a Brentwood, Pa., restaurant that flouted COVID-19 restrictions and was ordered to close will proceed after a federal bankruptcy judge denied the business’ request to stop the closure, the Pittsburgh Post-Gazette reported. The Crack’d Egg restaurant, owned by Kimberly Waigand, filed for chapter 11 protection in October after the health department ordered it to close. The restaurant owners tried to move the closure case into the bankruptcy proceedings. Because the shutdown is related to the federal case, the owners argued, the outcome could affect the bankruptcy and should be heard by the federal court. But the law cited by the restaurant has an exception for actions by government regulatory powers, such as the health department, that prevents them from moving the case, U.S. Bankruptcy Judge Jeffery A. Deller wrote. The judge sent the case back to Allegheny County Common Pleas Court, where it is set to be heard by Judge John T. McVay.

The owner of New York Sports Clubs and Lucille Roberts is seeking fresh equity capital to stave off a cash crunch less than two months after buying the gym chains out of bankruptcy, WSJ Pro Bankruptcy reported. The investor-backed acquisition vehicle that bought the fitness chains is soliciting investors for a $2 million equity raise to improve liquidity and fund working capital needs, giving a Wednesday deadline for potential participants to indicate interest. The chains were sold out of bankruptcy in November to Peak Credit LLC, an affiliate of New York-based investment banking firm Lepercq de Neuflize & Co., as well as a number of lenders to the chains’ former owner, Town Sports International LLC. Following Town Sports’ September bankruptcy filing, private-equity firm Tacit Capital LLC had proposed serving as the stalking-horse bidder to acquire the company’s assets. Tacit backed out when it failed to come up with the $47.5 million it had pledged to post to fund operations once the bankruptcy sale closed, according to court records. Peak stepped in for Tacit with a $5 million funding commitment to capitalize an acquisition vehicle called New TSI Holdings Inc. that would own and operate the chains, according to court documents.

After real-estate data company CoStar Group Inc. said in February it would buy competitor RentPath Holdings Inc. for $587.5 million, RentPath employees sent emails to customers saying prices would likely increase after the acquisition closed, WSJ Pro Bankruptcy reported. “If the sale does go through CoStar will control pricing for everything and most likely will go up,” a RentPath regional account manager said in a customer email after the deal was announced, according to a lawsuit filed Monday by CoStar that was ineffectively redacted. Days later in February, a RentPath salesperson told customers in southern New Jersey and Philadelphia, “I am strongly suggesting to all clients to lock in our low pricing because if the sale goes through it will not exist EVER again,” the lawsuit said. CoStar said in yesterday’s lawsuit that it was worried that the messages could be used by federal antitrust regulators to block the acquisition and that RentPath management didn’t correct information its employees sent to customers, despite requests from CoStar. In November, the Federal Trade Commission said it would block the deal, saying the transaction “would likely lead to anticompetitive effects.” The RentPath employee messages were outlined in a lawsuit CoStar filed in the U.S. Bankruptcy Court in Wilmington, Del., where RentPath filed for chapter 11 protection in February. CoStar cited the emails to support its allegation RentPath management engaged in “a customer misinformation campaign designed to boost RentPath’s short-term sales while poisoning the FTC approval process.” The companies are now fighting in court over the deal’s collapse. RentPath terminated the agreement and is seeking a $58.75 million breakup fee from CoStar, which has denied it is liable. CoStar said that RentPath didn’t do its best to make sure regulators would approve the transaction and now wants a bankruptcy judge to rule the company violated the terms of the agreement.