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Bankrupt crypto lender Genesis Global Holdco LLC has extended its mediation with creditors for the last time, a company lawyer said during a hearing yesterday, Bloomberg News reported. “If we do not make substantial progress with respect to a deal in principle in the next two weeks, we do not believe that we will be seeking to extend the mediation further,” company lawyer Sean O’Neal told US Bankruptcy Judge Sean Lane. As a result, the talks will have to wrap up by Aug. 16. Genesis has been in mediation with key stakeholders — including parent company Digital Currency Group and Gemini Trust Co. — since May. They’re trying to save a proposed bankruptcy exit plan backed by DCG that was rejected by its official committee of unsecured creditors. If the parties don’t come to a deal by Aug. 16, the crypto lender will move forward with its existing bankruptcy plan, subject to certain amendments, the lawyer said. The mediation is one of the final hurdles preventing Genesis from wrapping up its time in bankruptcy.

A number of prescription opioid manufacturers, including OxyContin developer Purdue Pharma and generics maker Mallinckrodt, have agreed to pay billions to settle lawsuits accusing the companies of fueling a drug abuse crisis in the U.S. The money they agreed to pay was meant to help communities fight opioid addiction and cover rehabilitation costs for individuals, WSJ Pro Bankruptcy reported. Three of those settlements are at risk of falling apart or being substantially reworked, putting more than $8 billion of settlement money intended for addiction victims and governments in jeopardy. The drug manufacturers in particular faced charges of deceptive marketing practices, as companies like Purdue told the public that less than 1% of patients became addicted to their opioid pills, although internal company correspondence revealed that they knew that the risk of addiction was in fact much higher. Purdue Pharma’s settlement is also at risk. The drugmaker and tens of thousands of addiction victims, state governments and municipalities last year reached a global settlement that includes a $6 billion contribution that Purdue’s owners, the Sackler family, agreed to pay. In July, however, the federal government filed an appeal to the Supreme Court to review the settlement, suggesting that the inclusion of legal waivers for the family members may not conform with U.S. law. If the justices agree to hear the case, it could take until the end of next year for a decision to be made on whether the releases are legally permissible, and even longer for funds to be distributed. If the Supreme Court decides that the Sacklers can’t get releases under their plan, it is possible the whole settlement will have to be reworked and renegotiated.

The Second Circuit on July 25 denied the request of the government to stay issuance of the mandate pending the U.S. Solicitor General’s petition for certiorari asking the Supreme Court to review the Purdue decision allowing the bankruptcy court to issue nonconsensual releases of creditors’ direct claims against nondebtors. The mandate from the Second Circuit is scheduled to issue today, allowing the Purdue debtor to consummate the chapter 11 plan originally confirmed by the bankruptcy court in New York in September 2021, according to a special analysis from Rochelle's Daily Wire. The government isn’t giving up. The Solicitor General filed an application in the Supreme Court on July 28, asking the high court to stay issuance of the mandate pending disposition of the government’s forthcoming certiorari petition. The Supreme Court immediately directed that responses be filed by noon on Friday, August 4. The response deadline suggests that a grant or denial of a stay could come as early as Friday afternoon.

The Buffalo (N.Y.) Diocese faces more pressure to make a deal with child sex abuse survivors after Catholic dioceses in Rochester and Syracuse recently took major steps toward exiting their chapter 11 bankruptcy proceedings, according to legal experts, the Buffalo News reported. The Syracuse Diocese announced on Thursday that it will pay abuse victims at least $100 million, and possibly more, through insurance funds, while Rochester last week negotiated a new deal with victims that now includes some insurance money, and would pay at least $126 million toward a settlement. The proposed deals in Rochester and Syracuse still must be approved by a vote of victim creditors and confirmed by a federal bankruptcy judge, but they provide the Buffalo Diocese with a potential path forward in resolving what has been a lengthy and arduous reorganization effort now in its 40th month. Mediated talks between the Buffalo Diocese and abuse survivors are ongoing, although the status of the negotiations is unclear because the parties are bound by a gag order.

FTX Group unveiled a draft creditor-repayment plan as part of its bankruptcy that calls for settling customer claims in cash and wiping out its digital token FTT, Bloomberg News reported. The plan — which FTX expects to amend based on feedback from stakeholders — proposes valuing customer claims in U.S. dollars as of the date it went bankrupt and repaying them by selling assets tied to various silos of the business, court papers show. FTX also still hasn’t ruled out rebooting an offshore exchange, according to the filings. Three so-called recovery pools will guide creditor repayments. They include assets linked to FTX.com customers, assets linked to FTX US customers and assets not clearly tied to the exchanges, court papers show. Almost every proposed creditor class is deemed impaired, meaning the company expects they will not be made whole. The plan calls for giving no recovery on account of FTT tokens due to their “equity-like characteristics,” advisers for FTX wrote in the filings. Equity is almost always wiped out in US bankruptcy reorganizations.

Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J.,threw out the second chapter 11 case that Johnson & Johnson filed to resolve its mass talc liabilities, again shutting down the healthcare-product company’s plan to achieve an $8.9 billion settlement, WSJ Pro Bankruptcy reported. Judge Kaplan said that J&J affiliate LTL Management LLC, created to carry the company’s talc-related liabilities into bankruptcy, wasn’t in sufficient financial distress to warrant granting it the legal protections of chapter 11. Friday’s ruling sets back J&J’s efforts to use the bankruptcy case to drive a settlement of mass claims alleging that its talcum-based baby powder caused cancer and contained asbestos, which the company denies. J&J said that it disagreed with the decision and would appeal. Outside of bankruptcy, J&J faces a tough road to resolving the talc litigation because of the large number of claims and the expectation that more talc users will sue for compensation in the future. In his ruling, Judge Kaplan cited a recent appeals court decision that threw out a prior bankruptcy case filed by LTL in 2021 to try to drive a settlement. A federal appeals court dismissed that chapter 11 case in January, but LTL filed for bankruptcy again in April, this time with a settlement offer supported by some plaintiffs’ law firms. That offer, valued at $8.9 billion, would rank among the largest tort settlements ever if accepted.

The Federal Deposit Insurance Corp. launched the sale of an $18.5 billion loan portfolio from Signature Bank this week, a pool of debt tied to major private equity and investing firms, Bloomberg News reported. The portfolio comprises 201 performing capital-call loans tied to firms including Starwood Capital Group, Carlyle Group Inc., Blackstone Inc., Thoma Bravo and Brookfield Asset Management Ltd., according to a person familiar with the matter who asked not to be identified citing private information. The loans for sale “consist of subscription credit facilities to private equity funds,” according to a notice from the FDIC. The FDIC declined to comment. A representative for Newmark didn’t immediately return a message seeking comment. The sale, which launched July 25, is limited to FDIC-insured depository institutions, according to the FDIC’s notice. The deadline for a bid is in September, with closing set for early October. Newmark Group Inc. is handling the sale.

Bankrupt crypto companies FTX Trading Ltd. and Genesis Global Holdco LLC reached an in-principle agreement on resolving a dispute involving their chapter 11 cases, Bloomberg News reported. Collapsed exchange FTX had argued that it was owed as much as $3.9 billion by crypto lender Genesis, a contention that Genesis rejected. The sum was later reduced to up to $2 billion. Their legal representatives said in a Thursday letter to a bankruptcy judge that the two parties’ claims against each other would be settled by the agreement. They plan to file motions to bankruptcy courts for approval of the deal. The letter didn’t provide details about the settlement. The settlement would likely be a relief for many Genesis creditors, who expected the disagreement to delay bankruptcy proceedings and the eventual payout of claims.