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Bankruptcy creditors are pointing to a trove of decade-old documents as they probe whether members of the billionaire Sackler family improperly took funds out of Purdue Pharma LP, the maker of OxyContin, to keep the assets away from victims of the U.S. opioid epidemic, Bloomberg News reported. Creditors including U.S. states, cities and counties cite recently unsealed memos and emails involving the Sacklers, whose company has twice pleaded guilty to illegally marketing OxyContin painkillers. Creditors say the documents are among “powerful circumstantial evidence” that the Sacklers were worried as early as 2007 about being sued personally and discussed ways to protect their fortunes. “Ask yourself how long it will take these lawyers to figure out that we might settle with them if they can freeze our assets and threaten us,” David Sackler, son of one of the company’s co-owners, said in a May 2007 email included in the unsealed files. The company’s first guilty plea came that same month. “We’re rich?” wrote Sackler, then a 27-year-old money manager who wasn’t employed at the company and didn’t then have a say in strategy. “For how long? Until which suits get through to the family?” Family representatives say that the Sacklers didn’t do anything improper. If creditors succeed in showing the Sacklers made what the creditors claim were “improper transfers,” a judge could order them to make repayments. The documents — made public this month in Purdue’s bankruptcy case — are part of an ongoing fight between more than 20 state attorneys general and Sackler family members over $10 billion the creditors said was improperly moved out of Purdue in the decade following 2007, and whether opioid victims should get some of those funds. The Sacklers are offering to turn over control of the drugmaker to state and local governments and personally pay $3 billion. Creditors say that’s not enough. Purdue filed for bankruptcy last year, citing lawsuits from state and local governments. Creditors scour bankrupt companies for certain pre-filing transfers because owners aren’t allowed to take valuable assets if they think the firm may seek bankruptcy protection. Purdue’s creditors argue in court filings that family members ramped up their efforts to draw money out of the drugmaker after the company’s 2007 plea, amounting to “more than $10.3 billion over the next 10 years — more than 90% of Purdue’s total free cash flow,” according to creditors’ filings.

Renovate America Inc. has filed for bankruptcy protection after tighter regulations and lawsuits chased it out of the business of assessments for energy improvement financing, WSJ Pro Bankruptcy reported. Renovate America bowed out of the assessment business in October, according to papers filed Dec. 22 in the U.S. Bankruptcy Court in Wilmington, Del. by Chief Financial Officer Christopher Powell, who blamed the company’s exit from the market on tighter underwriting rules and growing litigation. The loans backed by Renovate’s assessments, which allowed consumers to update their properties with the latest green-energy gadgets, wound up complicating efforts to refinance mortgages or sell homes. Local governments that authorized these financing deals got peppered with complaints from consumers about what they were told about the assessments and the loans, which were linked to property taxes.

While the Archdiocese of Agana has yet to compensate nearly 300 Guam clergy sex abuse survivors, it has already paid or been ordered to pay some $3.9 million of the $4.38 million in attorneys' and real estate professionals' fees and costs in its nearly two-year bankruptcy case, the Guam Daily Post reported. These figures are based on a review of proposed, awarded and paid amounts contained in documents filed in the District Court of Guam in 2019 and 2020. The numbers include recent fourth interim fee applications that the federal court will hear in January, amounting to about $480,601. The fourth interim fee applications cover bills for services rendered only from Aug. 1 to Nov. 30, 2020. After review and scrutiny of the proposed billings, inclusive of fees and reimbursable costs, District Court Chief Judge Frances Tydingco-Gatewood reduced many of the amounts from the first three billing cycles, saying the higher the legal fees, the lower the amount that could go to clergy sex abuse survivors. Other defendants in clergy sex abuse cases — including the Sisters of Mercy, the Capuchin Franciscans and the Boy Scouts of America — already have settled with some of the abuse survivors. The settlement amounts have been kept confidential. The archdiocese and other defendants are still in mediation to try to settle the abuse lawsuits, and the billing meters will continue to tick. If settlements fail, the clergy sex abuse lawsuits against the archdiocese could go to trial.

Bankruptcy Judge David Jones yesterday approved McKinsey & Co.’s settlement with Justice Department watchdogs over how the firm discloses potential conflicts of interest, effectively ending a legal battle on transparency in the U.S. bankruptcy system, WSJ Pro Bankruptcy reported. Under the settlement, announced earlier this month, McKinsey agreed to walk away from about $8 million in fees for work it did helping navigate Westmoreland Coal Co. through a 2018 chapter 11 filing. McKinsey didn’t admit to any wrongdoing but agreed to broaden the scope of disclosures made in future cases, including the names of confidential clients and potential conflicts involving its many affiliates. In return, the Justice Department agreed to drop an objection it filed in the Westmoreland case alleging McKinsey’s disclosures were legally insufficient. The settlement is the latest in several multimillion-dollar deals in recent years tied to questions about McKinsey’s disclosure practices. Bankruptcy advisers legally are required to be disinterested and to disclose connections that could give rise to a conflict of interest.

Mallinckrodt PLC shareholders lost their bid for an official committee to represent them in the drugmaker’s bankruptcy as it vies to dig out from an avalanche of litigation over opioid sales, WSJ Pro Bankruptcy reported. Bankruptcy Judge John Dorsey rejected the request yesterday, handing a win to Mallinckrodt, which is struggling to build support for a turnaround strategy that would resolve the company’s legal troubles. Like Purdue Pharma LP and Insys Therapeutics Inc., Mallinckrodt resorted to bankruptcy to try to get an agreement with states, municipalities, tribes and people seeking damages for the company’s alleged role in fueling the national epidemic of opioid addiction. In addition to opioid litigation, Mallinckrodt faces potential damages in an argument with the government over rebates to Medicaid for the company’s Acthar Gel product.

Renovate America Inc., which lends homeowners money to make “green” improvements such as adding solar panels or energy-efficient windows, filed for bankruptcy as litigation and the COVID-19 pandemic eroded revenue, Bloomberg News reported. Renovate’s lending was part of a government-backed program that lets people finance their loans by adding the payments to their property taxes. But consumer advocates and federal regulators have criticized them as expensive and susceptible to abuse. At least 56 legal cases are pending against San Diego-based Renovate, according to a chapter 11 filing on Monday. More than 115,000 loans were handed out by Renovate, according to its website. But revenue plummeted 81 percent between 2016 and last year after new legislation in California established tougher “ability-to-pay” standards for lending, according to a declaration filed by Chief Executive Officer Shawn Stone. Lawsuits have cost about $15 million since the beginning of 2018, Stone wrote. The COVID-19 pandemic provided the final push into bankruptcy, with financing volume dropping 47 percent in the first 10 months of 2020 compared with the previous year.

A bankrupt coal operator's request to liquidate its assets has been denied by a federal judge in West Virginia, the Associated Press reported. Blackjewel filed for chapter 11 protection in July 2019 and mostly halted operations. The company had sought to convert to chapter 7, which would allow it to liquidate its assets. The company said in court filings it didn't have the assets to continue reorganizing in a chapter 11 proceeding. Bankruptcy Judge Benjamin A. Kahn denied the request yesterday. Blackjewel's mine shutdowns put about 600 employees in Wyoming and 1,100 in Appalachia out of work last year, and left hundreds of Kentucky and Virginia miners without pay. Some of them held a months-long protest on a set of railroad tracks in Harlan County, Ky.