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The Diocese of Camden, N.J., and a lawyer for clergy sex abuse victims clashed Monday over the diocese's plan to reorganize its finances under chapter 11 protection, the Cherry Hill (N.J.) Courier Post reported. Attorney Jeff Anderson said that the reorganization plan would create a $10 million trust for victims, while directing more than $217 million to funds for other diocesan activities. "This plan has no relationship to their true ability to pay," said Anderson, who described the proposal as "a sneak attack" filed on Dec. 31. In a statement, the diocese said it "wants to continue to pay survivors rather than lawyers and other professional advisors." It claimed attorneys who handle clergy sex abuse cases "seem to want to elongate the process and see more money dissipated on wrangling." The diocese said it filed its plan in federal bankruptcy court in Camden after a committee representing victims refused to negotiate. Anderson, in contrast, contended the diocese acted "without any input from or consideration for clergy abuse survivors."

A top law firm’s raid of a rival’s bankruptcy talent is roiling a corporate feud over the multibillion-dollar cleanup bill for New Jersey’s polluted Passaic River, WSJ Pro Bankruptcy reported. The dispute concerns a number of high-profile hires by White & Case LLP, the law firm representing businesses that have sued Argentine energy giant YPF SA over environmental contamination linked to its defunct former subsidiary Maxus Energy Corp. White & Case in October poached rainmaker lawyer Jessica Boelter and other bankruptcy litigators from Sidley Austin LLP, the firm defending YPF against the pollution claims. Potential damages in the lawsuit, viewed as a test of U.S. environmental laws, include an estimated $12 billion tab for cleansing the Passaic of byproducts from the manufacture of Agent Orange, the Vietnam War-era defoliant once produced by a predecessor of Maxus. The dispute took a detour last month when YPF moved to disqualify White & Case, saying that its star hire Boelter knew too much about YPF’s legal strategy, which she helped design.

Tenants in bankrupt Manhattan apartment buildings affiliated with Emerald Equity Group LLC are demanding that housing code violations including rat infestations and bed bugs be immediately addressed as part of a chapter 11 agreement, Bloomberg News reported. Residents are seeking an order compelling the debtor, 203 W 107th Street LLC, to use available funds to address outstanding New York City Housing Court orders and make any urgent repairs to the buildings, according to court papers. Emerald purchased the apartments in December 2016 with the aim of converting them into condominiums as part of its business model of capitalizing on gentrifying neighborhoods. Instead, a cluster of its buildings filed for bankruptcy last week, blaming tougher housing regulations and a tenant rent strike for their debt troubles. Tenants, the debtor’s lawyers and the lender LoanCore, which is taking ownership of the buildings in bankruptcy, reached a tentative agreement to bring the properties into compliance with the housing code, the filing said. Kellner said the buildings have already been found in contempt of housing court orders to address violations, many of which are hazardous.

In the summer of 2007, after Purdue Pharma agreed to pay $600 million to resolve a federal investigation of opioid-marketing misconduct, the Sackler family members at the helm of the drug giant deliberated whether it was time to leave the pharmaceutical business, the Washington Post reported. “I think we need to discuss if fundamentally we want to be in the pharmaceutical business going forward. I would vote no,” wrote David Sackler, who was not in the company at the time of the June email to his father, Richard, and cousin Mortimer, both on the company’s board. The email chain was about the possible buyout of a smaller company. “I think we’ve all had enough of a rough ride over the past 10 years to make me wary of committing for another venture in the space,” he wrote. Copies of the emails, along with memos and messages from a family WhatsApp group chat, were unsealed last week in U.S. Bankruptcy Court for the Southern District of New York, where the company and its affiliates filed for relief in September 2019. The documents offer the most complete picture yet of the internal deliberations of the wealthy family that led one of the largest manufacturers of prescription painkillers during the height of the opioid crisis. Following the Justice Department settlement, the Sacklers met with a bankruptcy attorney, assessed selling the company to a larger firm and were advised to take “defensive measures,” including through “overseas assets with limited transparency and jurisdictional shielding from U.S. judgments,” according to the documents.

A disgruntled creditor of Speedcast International Ltd., which opposed a financial restructuring of the satellite-communications company, has obtained clearance to submit a late takeover offer to buy the company out of bankruptcy, WSJ Pro Bankruptcy reported. “We want to bid as soon as we can,” said Al Hogan, a lawyer for creditor Black Diamond Capital Management LLC, during a hearing Wednesday in the U.S. Bankruptcy Court in Houston. Subject to outstanding due diligence, Hogan said that “Black Diamond would absolutely prefer to own this asset than to see it sold to Centerbridge at the price under the current plan.” Black Diamond’s emergence as Speedcast’s potential acquirer is an unexpected twist that arose during a multiday trial over a plan backed by private-equity firm Centerbridge Partners LP. U.S. Bankruptcy Judge Marvin Isgur is allowing Black Diamond to bid for Speedcast and formulate an alternative transaction to get the company out of chapter 11 protection, after he expressed concerns about approving the Centerbridge-backed plan. Speedcast came to bankruptcy carrying about $689 million in long-term debt, which the company intends to cut through a financial restructuring. The company anticipates emerging from chapter 11 in the first quarter of 2021.

More than 2,000 victims of the Watson Grinding & Manufacturing explosion in northwest Houston are one step closer to getting their day in court, after a federal judge yesterday sent more than 126 cases filed against that company and others back to state court to move forward, the Houston Chronicle reported. The Jan. 24 explosion killed three men, two workers and a nearby resident, and rocked the working class neighborhood of Westbranch, damaging hundreds of homes. Affected residents have embarked on a gradual and often grueling recovery process, wrangling with insurers and rebuilding their homes when possible. Many filed lawsuits against Watson Grinding & Manufacturing and Watson Valve Services, Inc., the two companies located at the site of the explosion. The companies declared bankruptcy two weeks after the blast, effectively freezing the cases. U.S. Bankruptcy Judge Marvin Isgur’s ruling Wednesday essentially unfreezes them, attorneys said. The claims against those two companies, and other companies added to the lawsuits afterward, now will proceed in Harris County District Court. The parties plan to ask the state Supreme Court to appoint a judge to handle all of the cases together.

Chef Matthew Kelly is one of the few restaurateurs who has fought property insurers over pandemic business restrictions and won, the Wall Street Journal reported. His establishments are part of a group of restaurants that a North Carolina state court sided with this fall. The insurer has appealed the decision, which found the plaintiffs were entitled to payouts under business-interruption coverage. “I’m excited that we’ve made it this far, but that excitement and the win does not translate into relief until the job is completed,” Kelly said. Cases such as Kelly’s are keeping hope alive that some small businesses may receive insurance money to help them rebound from government-ordered shutdowns. In hundreds of lawsuits across the country, mostly small businesses have sued their property-insurance companies for refusing to pay out “business interruption” claims tied to the pandemic. Many insurers say their policies contain clear language excluding virus-related claims, while most claims also haven’t met their policies’ criteria. Many courts have backed up the insurers in their denials of payouts, but businesses are making progress. Of the roughly 100 rulings in suits pitting businesses against insurers, about three-quarters have been in favor of insurers, according to a COVID-19 litigation-tracking effort at the University of Pennsylvania Carey Law School.

The Department of Justice yesterday filed a Statement of Interest in In re Bestwall LLC in the U.S. Bankruptcy Court for the Western District of North Carolina, according to a DOJ press release. In this bankruptcy case, the debtor Bestwall LLC seeks to establish a trust to resolve its asbestos liabilities pursuant to 11 U.S.C. § 524(g), a provision in the Bankruptcy Code that provides the framework for responding to the unique issues associated with asbestos liability. As part of the bankruptcy, the court will evaluate the submitted asbestos claims and estimate the amount of the debtor’s asbestos liabilities. In order to ensure the accuracy of the estimation, the debtor has asked the court to require asbestos claimants to fill out a questionnaire providing basic information about their claims and to authorize discovery from other asbestos trusts to which claimants have submitted claims. The department’s Statement of Interest supports these proposed procedures on the ground that they will further transparency in the evaluation of the submitted asbestos claims and ensure the reliability of the estimation of the debtor’s asbestos liabilities. “It has become increasingly common for claimants’ counsel to seek duplicative recoveries from multiple sources by misrepresenting the asbestos products to which claimants were exposed,” said Deputy Assistant Attorney General Douglas Smith of the Justice Department's Civil Division. “Such duplicative claiming depletes resources that would otherwise be available to compensate deserving claimants filing claims in the future. Today’s Statement of Interest is one of many actions the department has taken over the last several years to encourage greater transparency in asbestos bankruptcy proceedings and prevent fraud.”

The Church of Jesus Christ of Latter-day Saints was hit with several lawsuits yesterday for allegedly covering up decades of sexual abuse among Boy Scout troops in Arizona, marking the latest litigation before the state's end-of-year deadline for adult victims to sue, the Associated Press reported. The church "must be held accountable in order to bring healing and closure to Mormon victims of childhood sexual abuse," Hurley McKenna & Mertz, a law firm that focuses on church sex abuse, said in a statement. In the seven lawsuits each representing seven different male victims, attorneys say church officials never notified authorities about abuse allegations. Public records show members of church-sponsored Boy Scout troops who were abused would tell church bishops about what they had experienced. The lawsuits allege bishops would then tell the victims to keep quiet so the church could conduct its own investigation. In the meantime, troop leaders and volunteers accused of sex abuse would be allowed to continue in their roles or be assigned to another troop, the suits said. Church spokesman Sam Penrod said in a statement that the faith has zero tolerance for abuse of any kind and that the serious allegations require thorough investigation. He called it inaccurate to say that the faith had access to files that had names of banned Scout leaders and said that the church hasn't seen the records that allegedly back the accusations. All seven victims are asking for a jury to award an unspecified sum for medical expenses, pain and suffering. They are also seeking punitive damages for the "outrageous conduct" of church officials. The church sponsored at least seven troops in Arizona in metro Phoenix and Tucson, according to attorneys. The suits were all filed earlier this month — six in Maricopa County Superior Court and one in Pima County Superior Court. The allegations of sexual abuse touch all troops between 1972 and 2009.

A bankruptcy trustee recovered and distributed $12 million to thousands of creditors who were victims of a $332 million investment fraud, the South Florida Business Journal reported. Cassel Salpeter and Co. chairman and co-founder James S. Cassel, who was appointed director of 1 Global Capital's estate in bankruptcy court, said that about 3,750 creditors that invested in the company received a payment. To date, Cassel has recovered $124 million on behalf of 1 Global Capital victims, after distributing an initial $112 million payment to investors in 2019. Cassel said that the liquidating trust will continue to pursue actions to generate additional returns to creditors. Hallandale Beach-based 1 Global Capital, which provided loans to small businesses, filed for chapter 11 bankruptcy in 2018. Soon after the bankruptcy filing, the U.S. Securities and Exchange Commission filed civil fraud charges against the company and former CEO Carl Ruderman, claiming they fraudulently raised $332 million from investors. According to the SEC lawsuit, 1 Global Capital overstated the value of investors’ accounts and their rate of returns and misappropriated at least $32 million to personally benefit Ruderman. Ruderman agreed to disgorge $32 million in ill-gotten gains and pay a $15 million civil penalty to settle the charges. Many of the scheme's victims were elderly individuals who invested between $50,000 and $100,000, Cassel said.