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Mallinckrodt Plc failed to line up funding for a loan deal designed to ease its debt load and help settle massive legal claims tied to its alleged role in the nation’s opioid crisis, Bloomberg Law reported. Lenders chose not to participate in a new term loan, and Mallinckrodt doesn’t expect that its existing credit agreement will be amended, the company said in a regulatory filing yesterday. Mallinckrodt is still looking to engage in discussions with debt holders about “refinancing alternatives.” The collapse casts doubt on Mallinckrodt’s plan to restructure the generic drug part of its business in bankruptcy. The goal was to keep the rest of the company operating normally by easing its debt load, and enable Mallinckrodt to handle costs of the opioid crisis. State and local lawsuits could cost more than $1.6 billion. It’s also facing about $650 million of rebates to the government tied to its flagship Acthar gel, which is used to treat multiple sclerosis. Mallinckrodt is disputing the rebates.

The judge overseeing Purdue Pharma LP’s bankruptcy shielded the OxyContin maker’s owners for another six months from lawsuits over the U.S. opioid crisis, saying that forcing them to defend themselves would disrupt settlement talks, the Wall Street Journal reported. Yesterday’s ruling by Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., extended the shield against litigation through October, against the wishes of state attorneys general who were seeking permission to resume lawsuits targeting members of Purdue’s controlling family, the Sacklers. Their lawsuits have been on hold since October, when Judge Drain extended to the Sacklers the shield against litigation that Purdue received when it filed for chapter 11 protection. Purdue has proposed a settlement of thousands of lawsuits from states, local governments and Native American tribes that blame the company and the Sacklers for helping fuel drug addiction through the powerful painkiller OxyContin. Two dozen state attorneys general aren’t on board with the proposed deal, under which the Sacklers would relinquish the company and pay another $3 billion. While the Sacklers haven’t declared bankruptcy themselves, Purdue has said they are more likely to come to terms with the holdout states if they are negotiating rather than fighting in court. With an initial standstill period set to expire, holdout states objected last week when Purdue sought another 180-day extension. They said that shielding the Sacklers from having to defend themselves in other jurisdictions would send a message that wealthy individuals can avoid having to answer for alleged wrongdoing. Purdue and the Sacklers have broadly denied they acted improperly regarding the company’s marketing and sale of OxyContin and said the bankruptcy process is the best way to reach a deal that would free up money for fighting opioid addiction.

Bishop Edward B. Scharfenberger took the helm as apostolic administrator of the Buffalo (N.Y.) Diocese when former Bishop Richard J. Malone resigned in December and immediately pledged that the diocese would be more transparent in dealing with abuse survivors. But plaintiffs claim that under Scharfenberger, the diocese has continued trying to conceal information that could be helpful to abuse victims, the Buffalo News reported. They pointed to the diocese’s chapter 11 filing on Feb. 28, which put on hold more than 250 lawsuits in State Supreme Court, outraging many plaintiffs who said that they had sued to force the diocese to reveal documents and answer for its handling of abusive priests. Even prior to the bankruptcy, the diocese’s lawyers fought for weeks in State Supreme Court against the release of more than 1,000 pages of confidential documents from the personnel files of two priests who have been accused in more than a dozen lawsuits. A judge eventually ordered the diocese to hand them over, but only to attorney J. Michael Hayes, who had filed motions to get the material. Justice Deborah A. Chimes, at the request of the diocese's lawyers, ordered Hayes not to share the documents. Scharfenberger has defended the bankruptcy filing, saying it was the only way to settle equitably so many lawsuits and continue the church’s mission. He said the move was not an effort to limit discovery in the lawsuits, and he said on the day of the bankruptcy filing that he will do “everything possible” to make documents available to victims “for whom it will be helpful in their process of healing.” Diocese spokesman Greg Tucker last week reiterated Scharfenberger’s intent, saying that the bishop wanted to give people who brought claims access to “essential information” in priest personnel files, to the extent he can without violating confidentiality laws.

California Gov. Gavin Newsom has agreed to drop his objections to a $20 billion financing package to lift PG&E Corp. out of bankruptcy, responding to concerns about how California’s largest utility will fare in turbulent financial markets, WSJ Pro Bankruptcy reported. The judge overseeing PG&E Corp.’s bankruptcy said yesterday that he would approve the financing package, which allows the company to raise $9 billion in new equity and $10.8 billion in new debt to dig itself out of chapter 11. Newsom has been a staunch critic of PG&E’s bankruptcy exit strategy, saying that it would bind the utility to pay excessive fees to big investment firms for a turnaround plan he has found unacceptable. But “given where the markets are,” Newsom agreed to not block the exit financing, his lawyer Matthew Hinker said at a hearing in the U.S. Bankruptcy Court in San Francisco.