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The U.S. Supreme Court on Tuesday declined to hear McKinsey & Co.'s bid to escape a lawsuit by retired turnaround specialist Jay Alix, who accused the management consulting firm of concealing potential conflicts when seeking permission from bankruptcy courts to perform lucrative work on corporate restructurings, Reuters reported. The justices turned away McKinsey's request that they overturn a lower court's decision that the lawsuit by Alix, who says the firm ran a "criminal enterprise" by hiding its ties to lenders and its clients' competitors. Alix's lawsuit accused McKinsey and several current or former employees of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), a U.S. law used to target illegal conspiracies that originally was designed to target organized crime. Alix, who has battled McKinsey in multiple courtrooms since 2016, sought triple damages under RICO, which lets people sue if they believe criminal enterprises caused them harm. U.S. District Judge Jesse Furman in Manhattan in 2019 dismissed the lawsuit, saying that Alix did not assert a "proximate" link between McKinsey's alleged wrongdoing and harm to AlixPartners. Alix reported owning a 35% equity stake in AlixPartners. The U.S. Court of Appeals for the Second Circuit in January revived the case, saying that Judge Furman gave "insufficient consideration" to whether McKinsey undermined the integrity of federal judicial proceedings. "If McKinsey's conduct has corrupted the process of engaging bankruptcy advisors, as Alix plausibly alleges, then the unsuccessful participants in that process are directly harmed," Second Circuit Judge Barrington Parker wrote. McKinsey in its petition to the Supreme Court argued that the Second Circuit's decision ran contrary to past rulings by the high court holding that RICO lawsuits may be brought only by plaintiffs injured "directly" by wrongdoing.

The Archdiocese of Santa Fe yesterday filed its long-awaited plan of bankruptcy reorganization to compensate nearly 400 clergy abuse survivors with more than $121 million, with an additional $4 million promised by the Servants of the Paraclete, which ran a national treatment center that funneled dozens of offenders into New Mexico Catholic parishes and schools, the Albuquerque Journal reported. Six insurers will pay $46.5 million of the $121.5 million negotiated amount, with the remaining $75 million contribution by the archdiocese, which has put more than $69 million into an escrow account, with a $5.4 million promissory note that must be paid in full by March 31. In addition, the Paraclete and three religious orders that have been sued in state court for clergy abuse will contribute an additional $7.85 million. The archdiocese’s contribution is considered to be among the largest settlements paid by an archdiocese in the country. The plan comes nearly four years after the archdiocese filed for bankruptcy reorganization to try to resolve mounting abuse claims and stem financial losses that date back to the early 1990s. At the time, the archdiocese was facing about 36 lawsuits.

A federal bankruptcy judge in New Orleans leveled a $400,000 penalty yesterday against a lawyer for clergy abuse survivors who allegedly revealed protected information about a priest to a Catholic school principal and a news reporter, NOLA.com reported. Bankruptcy Judge Meredith Grabill issued the sanctions against attorney Richard Trahant in a 30-page order, claiming he wrongfully disclosed information from discovery materials handed over in December in the Archdiocese of New Orleans' bankruptcy case. The information related to the Rev. Paul Hart, then chaplain at Brother Martin High School. Hart left his post in early January, days after the school was notified of allegations from 1990 that he kissed and fondled a Mount Carmel Academy senior while serving at another local Catholic institution. It wasn’t the embattled archdiocese that first alerted the school, however. Trahant admitted that he called the school principal, who is a cousin, after learning of the allegations involving Hart, who was not identified on the archdiocese's public list of credibly accused priests. Trahant also admitted he alerted a reporter for The Advocate to Hart's identity. Trahant insisted that he didn’t reveal any confidential documents, but admitted he “planted that seed” to expose Hart. He has argued that he didn’t violate the court’s protective order at all. “In no uncertain terms, I did what I did to protect children. I provided no documents. I read no documents to anyone,” Trahant said yesterday, adding that he would appeal the sanctions. Judge Grabill, however, found that his actions violated the protective order and caused harm, including “hurt and trauma revisited upon the survivor of the priest’s alleged abuse.” The judge also cited Trahant for failing to promptly come clean, resulting in a costly investigation by the U.S. Trustee.

The first bills from the army of lawyers and advisers working on the bankruptcy of crypto lender Celsius Network LLC are in and already adding up to millions of dollars, Bloomberg News reported. Alvarez & Marsal North America LLC, a financial adviser for the debtors, has asked to be paid about 80% of a near-$3 million bill for work involving 20 staffers over July 14 to Aug. 31, according to a filing Tuesday. In another filing, fees for a court-appointed examiner and her counsel were estimated at $3 million to $5 million, excluding additional expected costs from a financial adviser the examiner plans to retain. Celsius, once one of crypto’s most prominent lenders, suspended customer withdrawals in June and sought bankruptcy protection the following month. The market value of Celsius’s holdings has declined about $12.3 billion since the end of March to $1.75 billion, and the large majority will likely be deemed property of the bankruptcy estate, making customers the exchange’s only unsecured creditors, according to Negisa Balluku, a litigation analyst at Bloomberg Intelligence. Separately, Celsius said in a tweet that it’s filed a motion to set a deadline for customers to submit proofs of claim -- the so-called bar date -- and that the matter is due to be heard in court on Nov. 1.

A Connecticut jury resumed deliberations on Tuesday in a trial to determine how much conspiracy theorist Alex Jones must pay families of victims of the 2012 Sandy Hook mass shooting for falsely claiming that the massacre was a hoax, Reuters reported. Closing arguments concluded on Thursday in Waterbury, Conn., not far from where a gunman killed 20 small children and six staff members at Sandy Hook Elementary School in December 2012. Jurors deliberated all day on Friday but did not meet on Monday due to the federal holiday. Jones claimed for years that the massacre was staged by the government as part of a plot to take away Americans' guns. In August, another jury found that Jones and his company must pay $49.3 million to Sandy Hook parents in a similar case in Austin, Texas, where his Infowars website is based. Lawyers for the families of eight Sandy Hook victims in the Connecticut case said Jones and his company, Free Speech Systems LLC, cashed in for years on lies about the shooting, which drove traffic to Infowars and sales of products there. The trial was marked by weeks of anguished testimony from the families, who filled the gallery each day and took turns recounting how Jones’s lies about Sandy Hook compounded their grief. An FBI agent who responded to the shooting is also a plaintiff in the case.

More than 60 people who have accused Hertz Corp. of having them wrongly arrested won the right to join a lawsuit against the company, dealing another blow to efforts by the rental car giant to keep the allegations bottled up in bankruptcy, Bloomberg News reported. Under a legal standard set by Bankruptcy Judge Mary Walrath, the customers can sue for false arrest instead of battling the company in bankruptcy court. With the latest court maneuvers, more than 120 people are actively suing Hertz outside of bankruptcy court, according to an emailed statement by victim advocates. About 320 people have come forward to accuse the company of having them falsely arrested, according to lawyers leading the lawsuits. Those renters claim Hertz routinely called the police on customers, sometimes over a payment dispute and in a few cases after the company lost track of a rental car. The company lost a key court battle in June when Judge Walrath allowed more than 70 customers to sue for false arrests. Until June, Hertz had successfully kept nearly all the false arrest claims locked inside its chapter 11 case, where juries are not allowed and where it’s difficult to win punitive damages against a corporation. As more claims move from bankruptcy jurisdiction to state courts, Hertz faces higher litigation costs and the prospect of big jury verdicts. The false arrest claims could cost Hertz hundreds of millions of dollars, according to advocates for those suing the company.

An affiliate of Byndfit, a planned Washington, D.C., fitness center that said it would "revolutionize" the industry, has filed for chapter 11 bankruptcy amid a lawsuit filed by its Chinatown landlord that seeks to evict the tenant from the building and collect millions in what it alleges is unpaid rent, the Washington Business Journal reported. BF Chinatown LLC, a Byndfit affiliate created to operate a location on the ground floor of Terrell Place, an office building at 650 F St. NW across from Capital One Arena, filed for bankruptcy protection Aug. 30 in the U.S. Bankruptcy Court in Alexandria, per court documents. It filed just before midnight Aug. 31, when D.C. Superior Court was scheduled to hold a hearing related to its landlord’s motion for damages and to reclaim the space, court documents show. That location was to be launched in early 2020 as the first of several from the company and its co-founders, including Ryan Macaulay and Raymond Rahbar, according to a countercomplaint that BF Chinatown filed hours before it filed for bankruptcy protection. That plan hit delays due to the pandemic, per media reports. Today, the building owner, an affiliate of Beacon Capital Partners called Terrell Place Property LLC, claims it's owed more than $4 million in rent, related fees and other holdover costs, according to its Aug. 22 court filing. A Superior Court judge issued a protective order earlier in the year requiring BF Chinatown to begin making a series of payments into the court registry in order to remain in the space while the case was being litigated. Terrell Place claimed in court documents that the tenant had neither made those payments nor relinquished the space, and in mid-August, the court granted a motion imposing sanctions against the fitness firm for failing to comply with the court-imposed protective order.

After its sudden closure amid lawsuits and an avalanche of complaints, the North Carolina solar energy company Pink Energy has filed for chapter 7 bankruptcy, the Charlotte Observer reported. The Mooresville-based company, formerly known as Power Home Solar, filed Oct. 7 for liquidation bankruptcy in Western District of North Carolina, documents show. Pink Energy claims it has more than $138 million in debts and at least $100 million in assets, according to court documents. It’s the latest move by the eight-year-old solar company that served 35,000 residential solar customers in 16 states, including about 5,700 homes in North Carolina. Pink Energy’s troubles stems from what the company CEO Jayson Waller alleges was faulty equipment from its former business partner Wisconsin-based Generac Power Systems leading to “rampant consumer discontent.”

Former Celsius Network LLC executives withdrew $18 million in cryptocurrencies in the two months before the company filed for chapter 11, according to documents filed Wednesday to the bankruptcy court, WSJ Pro Bankruptcy reported. Alex Mashinsky, the former chief executive of the crypto lender, withdrew $10 million dollars in tokens between May and the bankruptcy filing on July 13, according to the court documents. His lawyer confirmed the size of his withdrawals. Mr. Mashinsky stepped down from his role in late September following a request from Celsius’ creditors. The filings also show that Mr. Mashinsky’s wife Kristine Mashinsky and former chief strategy officer Daniel Leon withdrew over $2 million and roughly $7 million worth of tokens, respectively, during the same period. Representatives for Ms. Mashinsky and Mr. Leon didn’t immediately return a request for comment. Mr. Leon stepped down from his role on Wednesday. Celsius, one of the biggest crypto lending platforms, froze customer withdrawals in June. When Celsius filed for bankruptcy the following month, it said that it owed users $4.7 billion. Thousands of Celsius customers have banded together to try to retrieve the crypto assets in bankruptcy. The company’s creditors committee has a continuing investigation of Celsius, lawyers for the group have said in court. State regulators said that Mr. Mashinsky made false and misleading statements to Celsius customers about the firm’s financial health, and that the company had massive losses going back to 2021.

Bitcoin miner Marathon Digital Holdings has revealed $81.3 million worth of exposure to recently bankrupted mining hosting provider Compute North, CoinTelegraph.com reported. Marathon provided a breakdown of its exposure on Oct. 6, explaining the majority was in operating deposits worth $50 million, noting these deposits “were primarily related to King Mountain and Wolf Hollow security deposits and prepayments associated with the ongoing operation of those sites.” The remainder is split between $21.3 million allocated to “an unsecured senior promissory note” and $10 million in convertible preferred Compute North stock. It comes weeks after Compute North submitted a chapter 11 bankruptcy filing in the United States Bankruptcy Court for the Southern District of Texas on Sept. 23. Marathon Digital said portions of its BTC mining operations are hosted by Compute North in locations such as Texas, Nebraska and South Dakota. The firm has outlined that at this stage, its operations hosted by Compute North will continue to operate as usual.