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Hospital operator Verity Health System of California Inc. won bankruptcy-court approval to sell a Los Angeles-area facility to Prime Healthcare Services Inc. for more than $350 million despite objections from the state attorney general and an opposing bidder, the Wall Street Journal reported. California Attorney General Xavier Becerra, a Democrat, had set 21 conditions for the sale of St. Francis Medical Center in Lynwood, Calif., to Prime, three of which Verity challenged as overly burdensome. The attorney general opposed authorizing the sale of St. Francis to Prime and objected to Verity’s chapter 11 liquidation plan. However, Judge Ernest Robles of the U.S. Bankruptcy Court in Los Angeles overruled the objections yesterday, paving the way for St. Francis to be sold free and clear of the regulatory obligations asserted by the attorney general. The judge also said he would confirm Verity’s liquidation plan. The company filed for bankruptcy protection in 2018.

Lawyers for Boy Scouts sexual-abuse victims are seeking to reverse a property transfer by a Scouts council in Tennessee to an “asset protection trust,” saying assets are being shifted out of their reach, WSJ Pro Bankruptcy reported. The Boy Scouts of America, which filed for bankruptcy this year, says the transfer was proper, according to court papers. Lawyers for victims say moving assets out of their reach endangers the trust the Boy Scouts need if the organization wants to restore confidence in its brand. “The Scouts are in a precarious position with respect to its ability to successfully reorganize,” lawyers for an official bankruptcy committee that represents victims wrote. The Boy Scouts of America said: “All 253 local councils have agreed to share information with the Tort Claimants’ Committee regarding past and future transactions involving their assets. This clearly demonstrates that the BSA and the local councils are committed to working through a productive, mediated process.” The Middle Tennessee Council of the national youth organization transferred five parcels of real estate and other holdings to the trust in June, according to court papers. “Without access to the Middle Tennessee Council’s assets, which are property of BSA’s bankruptcy estate, it will only make it more difficult for BSA to propose a plan that fairly compensates the victims of childhood sexual abuse,” the victims lawyers wrote. The bulk of the Boy Scouts’ wealth — land, investments and other assets — is in the hands of local groups like the Middle Tennessee Council. Like hundreds of other local councils, the Middle Tennessee group, based in Nashville, didn’t file for bankruptcy when the national group did. But the local councils are participating in the bankruptcy negotiations, hoping to win a reprieve from lawsuits that named them as defendants, along with the national organization.

A federal appeals court is letting investors keep roughly $1 billion they received from Lehman Brothers Holdings Inc. after its 2008 bankruptcy filing triggered the liquidation of dozens of collateralized debt obligations, WSJ Pro Bankruptcy reported. The defunct investment bank can’t recoup the money from insurers, banks and hedge funds that invested in 44 synthetic CDOs written before the financial crisis, according to the ruling issued Tuesday by the U.S. Court of Appeals for the Second Circuit in New York. The three-judge panel said the investors deserved to be repaid first, ahead of Lehman itself, from the liquidation of the CDOs and the high-grade securities they held. The ruling hinged on “flip clauses” in transaction documents that subordinated Lehman’s interests in the event it filed for bankruptcy and unwound the CDOs. Two years after Lehman’s chapter 11, its bankruptcy administrators filed litigation claiming the flip clauses were unenforceable under U.S. bankruptcy law. If it had been successful, the litigation could have clawed back what the noteholders collected and redistributed the money among other Lehman creditors. But lower courts ruled in favor of the noteholders and yesterday’s decision affirmed that ruling.

Families of nine victims of the Sandy Hook school shooting are challenging weapons maker Remington Outdoor Co.’s proposal to quickly sell its assets in bankruptcy, asking how the company landed back in chapter 11 at a time when Americans are buying guns at record levels, the Wall Street Journal reported. In a court filing Friday, lawyers suing Remington over the 2012 mass killing of 20 children and six school staff members in Newtown, Conn., questioned how the company found itself in such desperate financial shape after wiping away hundreds of millions of dollars in debt in a previous bankruptcy in 2018. Remington filed for chapter 11 protection again last month, saying that even with Americans stocking up on guns and ammunition, it couldn’t profit because its cash is tied up by lenders. Gun sales have been driven by civil unrest sparked by the COVID-19 pandemic and the killing of George Floyd by police. The company said it wouldn’t last long without finding a buyer. The Sandy Hook families said on Friday that they aren’t convinced and questioned the company’s motivations for seeking bankruptcy protection, asking for a delay in the bankruptcy sale process. Remington has agreed to delay hearings on its sale process by a week, to give a newly appointed creditors committee time to weigh in.

The NAACP on Friday moved to intervene in Purdue Pharma's chapter 11 case, arguing that communities of color should receive settlement proceeds stemming from the national opioid crisis, Reuters reported. The group's motion to intervene comes amid the OxyContin-maker's efforts in bankruptcy to bring in more support for a settlement of opioid litigation that it says is worth more than $10 billion. The company filed for chapter 11 in September 2019 aiming to resolve the litigation. In its filing, the NAACP argues that attention has been disproportionately paid to white suburban and rural areas affected by the epidemic, rather than communities of color that have endured similar harm. U.S. Bankruptcy Judge Robert Drain in New York will consider the group's request at a court hearing on Aug. 26.

Families of victims of the 2012 mass shooting at Sandy Hook Elementary School rebuked Remington on Wednesday for leaving them off of its chapter 11 bankruptcy creditors list, saying that damages they are seeking in litigation should be included, Law360 reported. The families told an Alabama federal bankruptcy court that the potential damages from their wrongful death suit against Remington Arms Co. LLC would "dwarf" the other claims of the company's top 40 creditors and that there is "no justification" for them not to be included on the list. "After six years of nationally significant litigation, it is simply not plausible that the debtors did not realize that the Sandy Hook families should have been included as top 40 unsecured creditors," the families said, adding that the omission is "glaring" considering the fact the families were included on the list when the company filed for bankruptcy in 2018. In light of the omission, the families urged the bankruptcy court to hold an emergency status conference, arguing that they would be irreparably harmed if they are not included on the list because they would be unable to participate in hearings and would not be considered for the unsecured creditors' committee.

A New Jersey appeals court’s decision to revive two lawsuits accusing Johnson & Johnson’s iconic Baby Powder of causing cancer may lead to the reinstatement of about 1,000 suits targeting the talc-based product, Bloomberg News reported. A three-judge panel of the New Jersey Superior Court said on Wednesday that a trial judge erroneously threw out expert testimony backing up claims by two women that talc caused their ovarian cancers, clearing the cases for trial. The ruling could also affect other talc cases on hold before the same judge. “There are approximately 1,000 ovarian cancer cases currently filed in New Jersey state court, with more to come,” Ted Meadows, one of the lawyers representing women bringing the baby powder cases, said in a statement. “This ruling paves the way for those cases to proceed to trial.” That’s unwelcome news to J&J, which is headquartered in New Brunswick, New Jersey, and previously tried to transfer most talc litigation to the state in the belief that it might have a home-court advantage. Wednesday’s ruling and a New Jersey jury’s February award of $750 million in a talc case may help dispel that notion. J&J pulled Baby Powder off the market in the U.S. and Canada in May. The number of cases alleging it causes cancer continues to mount, though, increasing 15 percent over the last eight months, according to J&J securities filings. The company now faces more than 20,000 talc lawsuits, some claiming talc itself causes cancer and others pointing to alleged asbestos contamination in talc. Imerys Talc America, a unit of Paris-based Imerys SA that mined talc used in J&J’s baby powder, also was named as a defendant in the cases. But it sought bankruptcy protection from creditors last year. The company is offering to settle more than 14,000 talc lawsuits by selling itself and other Imerys units as part of the bankruptcy and putting the proceeds into a trust for claimants.

Calls to protect corporations and schools from legal blame if workers fall ill from COVID-19 contracted on the job have incited a growing backlash as Congress and the White House negotiate over liability protections in economic relief legislation, the New York Times reported. Businesses, hospitals, schools and the trade groups that represent them have pushed for any relief package to include protections from COVID-related lawsuits. But so far, there has been little sign of a surge in litigation as the economy reopens, and prominent voices have opposed such a measure, arguing that liability shields are unfair to workers and that businesses must take responsibility to keep them safe. The issue has spilled into the world of sports. College Athlete Unity, an organization that represents thousands of athletes at universities, wrote a letter yesterday to the N.C.A.A. and the Big Ten Conference urging them to revise plans for resuming fall sports. Among the proposals was to ban the use of COVID-19 waivers. The players’ associations for the N.F.L., N.B.A., N.H.L., Major League Baseball and Major League Soccer have made a similar plea. In a letter to top Republican and Democratic lawmakers last Friday, they said that inserting liability protections in the legislation would be wrong. Some businesses — including salons, amusement parks, gyms and even President Trump’s campaign rallies — have required those who come in their doors to promise not to sue if they contract the virus. But a Republican proposal would offer a much bigger shield: It would provide five years of legal protection for businesses, hospitals, schools and nonprofits that make “reasonable efforts” to comply with government standards to protect their workers and customers from coronavirus-related lawsuits.