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New York State Attorney General Letitia James filed a lawsuit on Nov. 23 against the Diocese of Buffalo and Bishop Richard J. Malone, who headed the diocese from 2012 to 2019, and newly retired Auxiliary Bishop Edward M. Grosz. The suit alleges a two-decades-long cover-up of how the diocese failed to deal with numerous priests accused of alleged sexual abuse, Catholic News Service reported. The goal of the 218-page lawsuit aims to establish an “independent review” of the diocese’s “response to alleged sexual abuse; require reporting to the attorney general for a period of five years; and mandate external oversight of “an appropriate remedial and compliance plan.” It seeks to ban Bishops Malone and Grosz from working in “future service in a secular role as a director or officer of any charitable organization” in New York. The suit also seeks damages and restitution. The investigation by the state started in September 2018. The lawsuit also names Bishop Edward B. Scharfenberger of Albany in his capacity as apostolic administrator of Buffalo. Bishop Scharfenberger took over control of the diocese in December 2019 after Bishop Malone resigned. In February of this year, faced with over 250 lawsuits at the time alleging clergy sex abuse, the Diocese of Buffalo filed for chapter 11 bankruptcy protection. The lawsuits were the product of New York state’s Child Victims Act, which allows victims to seek action against their abusers until they are 55 and opened a one-year look-back window in August 2019 for people who were sexually abused to seek civil action against their alleged abusers. The Child Victims Act’s deadline for filing these look-back cases has been extended to Aug. 21.

States suing Purdue Pharma LP over the marketing of its OxyContin painkiller are demanding access to confidential documents as part of a probe into whether some members of the billionaire Sackler family engaged in misconduct when they managed the opioid maker, Bloomberg News reported. More than 20 states said federal prosecutors’ claims tied to a $225 million accord unveiled last month provide a “substantial reason” to believe some of the Sacklers “committed crimes in operating Purdue and secreting its assets,” according to a bankruptcy filing Wednesday. The family members deny the allegations. Those states want U.S. Bankruptcy Judge Robert Drain to force the Sacklers to hand over files they claim are confidential as part of an investigation into whether shifts of “billions of dollars out of Purdue” amounted to fraudulent transfers, the filing shows. Judge Drain signed off on an $8.3 billion settlement between Purdue and the U.S. government last week. The states point to the U.S. government’s assertion in settlement documents that Sackler family members transferred funds out of Purdue “with the intent to hinder future creditors and/or were otherwise voidable as fraudulent transfers,” according to court filings. Jim Boffetti, an assistant attorney general in New Hampshire who is overseeing the office’s opioid litigation, said his state is among those who want access to Purdue’s confidential documents about the fund transfers.

Bankruptcy lawyers cleaning up after the collapse of Philadelphia’s historic Hahnemann University Hospital are seeking help from a judge in getting answers from affiliates of Joel Freedman, the California investor who controlled the hospital, about real-estate transactions, WSJ Pro Bankruptcy reported. Freedman led the 2018 buyout of Hahnemann and its sister institution, St. Christopher’s Hospital for Children. By mid-2019, he was wrangling with Pennsylvania health authorities over plans to shut down a hospital that anchored the city’s services to the poor and homeless, as well trauma victims. Now he is being pressed for documents in bankruptcy court where Hahnemann and St. Christopher’s wound up last year, out of money and looking for buyers. Creditors have mounted “a total assault on our attorney-client privilege,” Edward Moss, lawyer for Freedman’s affiliates, said at a Friday court hearing on the dispute over documents.

Between COVID-19 pressures and more than 95,000 sexual-abuse claims, the survival of the Boy Scouts of America is on the line in bankruptcy court, lawyers for the national youth group said yesterday, WSJ Pro Bankruptcy reported. “Covid and the bankruptcy together have created a perfect storm,” said Jessica Boelter, the lead lawyer steering the Boy Scouts through chapter 11, at the organization’s first court appearance since the deadline passed on Monday for sexual-abuse survivors to step forward and file compensation claims. Without a bankruptcy settlement by next summer with those tens of thousands of men, she said, the organization will be out of money. Revenue as of September was down 50 percent compared with last year as pandemic restrictions have curbed camping activities, Boelter said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del. Meanwhile, the Boy Scouts racked up $41 million in bankruptcy costs while attempting to address its failure over the years to screen out sexual predators who went on to abuse youngsters. The number of claims exceeded even the loftiest estimates of some sex-abuse attorneys who had spent years suing the Boy Scouts, Catholic dioceses and other institutions for their alleged liability in past misconduct.

A bankruptcy judge approved an $8.34 billion settlement between Purdue Pharma LP and the Justice Department that requires the drugmaker to plead guilty to three felonies over its marketing and distribution of OxyContin and is structured to support state and local government programs addressing the opioid crisis, WSJ Pro Bankruptcy reported. Approval of the agreement yesterday by Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., marks a milestone in Purdue’s chapter 11 case and advances the drugmaker’s goal to turn itself into a corporate trust run for the benefit of the public. Judge Drain also cleared members of the Sackler family who own Purdue to make a related $225 million payment to the Justice Department to resolve civil charges. The deal was opposed by two dozen states, including New York, New Jersey, California and Illinois, that argued the terms improperly blocked Purdue and its creditors from pursuing a potential sale of the business. Purdue intends to emerge from bankruptcy as a public-interest company owned by a trust or similar entity, the details of which haven’t been ironed out. Judge Drain urged lawyers for Purdue and the states opposing the settlement to negotiate over the next month and resolve open issues over the drugmaker’s potential legal claims against the Sacklers and the structure the company will take upon its emergence from chapter 11.

Dozens of lawyers and other professionals have billed the Buffalo Diocese $1.9 million for their work so far on the diocese’s bankruptcy case, the Buffalo News reported. More than 30 attorneys in five law firms that charge from $150 to $843 per hour have worked on behalf of the diocese since its chapter 11 filing on Feb. 28. In addition, the diocese is on the hook for U.S. trustee fees and for fees charged by two additional law firms that represent the committee of unsecured creditors, which consists of childhood victims of sex abuse. The diocese also hired a financial firm, a public relations firm and a research firm, each of which has submitted a bill for work over the past eight months. The charges revealed in court papers filed over the past few weeks are on top of the more than $2 million the diocese spent on attorneys in the 12 months prior to the bankruptcy filing, primarily defending against more than 200 lawsuits alleging childhood sex abuse by priests and other employees.

Mallinckrodt PLC has gained wider support for its proposed $1.6 billion settlement of thousands of lawsuits that accuse the bankrupt drugmaker of helping fuel the opioid crisis, reaching agreement with more than a thousand U.S. counties, cities and tribes, WSJ Pro Bankruptcy reported. The proposed restructuring deal covers municipalities in dozens of states, among them Texas, West Virginia and Pennsylvania, according to papers filed Saturday in the U.S. Bankruptcy Court in Wilmington, Del., and builds on existing support from territories, state authorities and the holders of most of Mallinckrodt’s unsecured bond debt. The settlement of opioid litigation and the billions of dollars in potential damages is key to the company’s planned chapter 11 restructuring. Mallinckrodt Chief Transformation Officer Stephen Welch testified during a court hearing yesterday that the company is facing more than 3,000 opioid-related lawsuits. Welch has helped lead Mallinckrodt’s restructuring efforts. Mallinckrodt is also facing additional litigation related to its Acthar Gel drug used to treat lupus, multiple sclerosis and other ailments. Mallinckrodt officials yesterday argued to extend a legal shield freezing the Acthar lawsuits while it pursues its chapter 11 restructuring.

The North American Talc Subsidiaries of Imerys (Imerys Talc America, Imerys Talc Vermont, and Imerys Talc Canada) announced that the U.S. Bankruptcy Court for the District of Delaware has approved the sale of substantially all of the debtors' assets, plus an agreement to assume certain assumed liabilities, to Magris Resources Canada Inc., according to a press release. Magris emerged as the successful bidder after having been selected as the stalking-horse bidder by the debtors on October 13. As previously disclosed, Magris will acquire substantially all of the Debtors' assets for a purchase price of U.S. $223 million, plus the assumption of certain Assumed Liabilities. The transaction is subject to customary closing conditions and regulatory approvals, as well obtaining U.S. and Canadian court approval. A hearing to recognize the yesterday's U.S. bankruptcy court ruling is scheduled before the Canadian court on November 25. After receiving court approvals, the debtors will move to close the transaction, with a goal of closing by the first quarter of 2021.

More than 82,000 people have come forward with sex-abuse claims against the Boy Scouts of America, describing a decades-long accumulation of assaults at the hands of scout leaders across the nation who had been trusted as role models, the New York Times reported. The claims, which lawyers said far eclipsed the number of abuse accusations filed in Catholic Church cases, continued to mount ahead of a Monday deadline established in bankruptcy court in Delaware, where the Boy Scouts had sought refuge this year in a bid to survive the demands for damages. Paul Mones, a lawyer who has been working on Boy Scouts cases for nearly two decades, said the prevalence of abuse detailed in the filings was breathtaking and might reflect only a fraction of victims. One coalition of attorneys, operating as the group Abused in Scouting, has clients from all 50 states along with cases in which the abuse occurred overseas at places such as military bases in Japan and Germany. The accusers range in age from 8 to 93. While the vast majority are men, some women have also filed complaints. The avalanche of claims, 82,663 of them by late Sunday, set up a monumental task for the bankruptcy case as the Boy Scouts seek to one day emerge with its operations intact. The national organization has more than $1 billion in assets, according to its bankruptcy filing. The organization also has a network of local Boy Scouts councils that own hundreds of camps and other properties across the country where scouts can advance their skills and values along lake shores and in mountain valleys. As the Boy Scouts seek to reorganize and set up a victims’ compensation fund under the chapter 11 filing, a judge set today as the deadline for victims to come forward with claims that will ultimately undergo a vetting process. In a statement, the Boy Scouts of America said that the organization was “devastated by the number of lives impacted by past abuse in Scouting.” The organization said it had sought an accessible process for survivors to seek compensation.