%1

A lawyer for families of victims of the 2012 Sandy Hook mass shooting told a Connecticut jury on Tuesday that conspiracy theorist Alex Jones will never stop profiting off destructive falsehoods unless he pays for the lies he told about the massacre, Reuters reported. The lawyer, Christopher Mattei, made his assessment during opening statements at a trial being held in a state court about 20 miles from where 20 children and six staff members were killed on Dec. 14, 2012, at the Sandy Hook Elementary School in Newtown, Connecticut. Jurors will decide how much in damages Jones owes 13 family members of victims as well as one FBI agent for claiming the massacre was a hoax. Jones' trial in Waterbury, Conn., comes one month after a jury in Austin, Texas, awarded two parents $49.3 million in a similar case. Infowars is based in Texas. Mattei told jurors it was important to stop Jones and his right-wing Infowars brand from "preying on people who are helpless" and encouraging years of harassment from Jones' followers. He said Infowars drew millions of followers with bogus claims about Sandy Hook, and made as much as $800,000 a day selling supplements, doomsday supplies and other products.

Endo International plc sued hundreds of state and local governments on Friday, seeking a ruling that their lawsuits accusing the company of helping fuel the U.S. opioid epidemic must be paused during the pharmaceutical company's bankruptcy, Reuters reported. In a filing in U.S. bankruptcy court in Manhattan, Endo said if those lawsuits are allowed to continue, the company will not be able to focus on successfully completing its restructuring, including a comprehensive resolution of the opioid claims. Endo filed for chapter 11 protection on Aug. 17, seeking to address its high debt load and resolve more than 3,100 lawsuits accusing the company of deceptively marketing prescription opioids like Opana by downplaying the risk of addiction. Before filing for bankruptcy, Endo reached a $450 million settlement with more than 30 states to resolve the lawsuits, but it still faces litigation risk from state and local governments that have not agreed to participate in the settlement. Other state and local governments, including Florida and West Virginia, had previously settled their opioid claims against Endo.

The Boy Scouts of America secured approval of a $2.46 billion reorganization plan from a bankruptcy judge on Thursday that will allow the youth organization to exit chapter 11 and settle decades of claims by more than 80,000 men who say they were abused as children by troop leaders, Reuters reported. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Del., signed off on the restructuring plan after the Boy Scouts made changes to address portions of a previous settlement proposal she had rejected. The biggest change in the amended plan was the removal of a $250 million settlement payment from the Church of Jesus Christ of Latter-day Saints, which Judge Silverstein refused to approve. Judge Silverstein said that part of that settlement proposal went too far in attempting to protect the Mormon church from abuse claims that were only loosely connected to scouting activities. The Irving, Texas-based organization has said the reorganization will allow it to continue its scouting mission free from the threat of costly litigation.

Hedge funds shouldn’t be able to keep roughly $500 million they were mistakenly paid by Citigroup Inc. on a loan owed by now-bankrupt cosmetics company Revlon Inc., a federal appeals court ruled yesterday, WSJ Pro Bankruptcy reported. The U.S. Court of Appeals for the Second Circuit said a lower court erred in allowing Revlon lenders including Brigade Capital Management, Symphony Asset Management LLC and HPS Investment Partners LLC to retain the “huge windfall” they collected from the bank’s back-office blunder. The court ruling is a major blow to the investment firms in their long dispute with Citi, which in 2020 prematurely paid off with its own money a nearly $900 million loan balance owed by a struggling Revlon. Some lenders returned roughly $385 million at the bank’s request when it realized its mistake. Others refused, touching off a legal dispute with Citi, the administrative agent in charge of distributing periodic interest payments from Revlon. Those lenders could now find themselves fighting it out with Revlon to collect as much as they can on the original loan, though their prospects for repayment are uncertain after the company filed chapter 11 in June. The appeals court said the investment firms weren’t entitled to the money because Revlon’s debt wasn’t yet due when it was paid down. A judge on the three-member panel, Michael Park, wrote that allowing them to keep a mistaken payment would “topple the settled expectations of participants in the multitrillion-dollar corporate-debt market” and be “brutally unfair.”

A group of Celsius Network borrowers wants a bankruptcy court to appoint an independent examiner to investigate the crypto-lender’s financials, but not one working for the U.S. Trustee’s office, CoinDesk.com reported. Celsius filed for bankruptcy protection earlier this summer. Its attorneys maintain that the company can recover with the aid of a still-being-built mining operation. The U.S. Trustee’s office petitioned the U.S. Bankruptcy Court for the Southern District of New York last month to let it appoint an independent examiner, saying that the company is not being transparent about its financial situation. Four Celsius borrowers – Zaryn Dentzel, Gregory Kieser, Joseph Eduardo and Michael Conlan – said in a Wednesday court filing that while an independent examiner should be appointed, this person should not come from the U.S. Trustee’s office. “The borrowers are concerned that the wide scope of the examination proposed by the U.S. Trustee will significantly delay the resolution of this case. Given the current monthly cash burn in this case, this delay will cost the estate tens of millions of dollars,” the filing said. The borrowers also said they would like the examiner’s focus to be on maximizing the funds recovered, rather than on Celsius’s past behavior. To that end, the borrowers asked the court to appoint a chapter 11 trustee. The U.S. Trustee’s effort to appoint an examiner, however, received support from state regulators probing Celsius. Vermont’s Department for Financial Regulation (DFR) boosted the U.S. Trustee’s claims on Wednesday, announcing in a filing that Celsius’s liabilities may have exceeded its assets for as long as three years, excluding the company’s CEL token holdings – which DFR alleged Celsius manipulated to bolster its balance sheet.

Insolvent crypto lender Voyager Digital Ltd. has drawn enough interest from potential buyers to necessitate an auction, Bloomberg News reported. The auction will be held at 10 a.m. on Sept. 13 in the New York offices of Voyager’s investment bank Moelis & Co., according to a notice filed in bankruptcy court on Tuesday. A court hearing to approve the results is scheduled for Sept. 29. The need for an auction means Voyager received more than one acceptable bid for its assets and no bid was clearly the best. That could be good news for Voyager customers still locked out of their accounts: a higher final price tag for Voyager may result in better recoveries for customers. Sam Bankman-Fried’s FTX and Alameda publicly disclosed a joint bid for Voyager in July, but Voyager called it a “low-ball” offer.

3M Co. should be blocked from spinning off its health care business and paying shareholder dividends in order to preserve money that soldiers suing the industrial conglomerate expect to win, according to a new federal lawsuit, Bloomberg News reported. A group of soldiers who claim faulty 3M earplugs damaged their hearing want a judge to ensure that the company has enough assets to pay tens of billions of dollars in judgments it could lose in the future. The company faces more than 200,000 lawsuits from veterans who used the earplugs. The complaint, filed in Pensacola, Florida, accuses 3M of trying to protect valuable assets in its health care business from being used to pay soldiers who win their cases. Verdicts against 3M in a handful of initial trials shows that the company may be forced to pay out at least $82 billion, according to the complaint. A representative of the company did not immediately respond to a request for comment. The company has said it is willing to set up a trust fund with $1 billion to pay legitimate claims. 3M has been fighting the claims in federal court in Pensacola for about 3 years. A federal judge is overseeing the initial, procedural steps needed to prepare the lawsuits for separate jury trials that would take place in other courts. Read more.

3M Co. plans to eliminate jobs as part of a broader cost-cutting drive in response to the slowing economy, according to internal communications, Bloomberg News reported. The move comes just days after 3M suffered a setback over a key legal strategy designed to mitigate mounting liabilities and as it faces an array of other challenges, ranging from inflationary woes to sluggish growth. Michael Vale, head of 3M’s safety and industrial division, disclosed the planned cuts in a message to employees of the unit. “The business can’t avoid this tough necessity,” he said in the communication, which was reviewed by Bloomberg News. The scope of the workforce reduction couldn’t be immediately determined, but in the memo Vale said other parts of the company would see similar actions. 3M, which makes everything from dental adhesives to Post-it notes, employed about 95,000 people at the end of 2021, according to securities filings. The multinational manufacturer has underperformed in recent years amid supply-chain snags, currency fluctuations and rising costs. 3M said in July it will spin off its health-care operation, which accounted for almost a quarter of sales. Management also cut its full-year sales and profit outlook. It also potentially faces billions of dollars in future costs tied to environmental liabilities and lawsuits alleging that it sold faulty combat earplugs to the U.S. military that led to hearing damage. A bankruptcy judge last week rejected 3M’s attempt to use controversial bankruptcy rules to halt those claims, allowing them to proceed to trial. 3M has said it plans to appeal the ruling. Read more.

The Boy Scouts of America is nearing final approval of a reorganization plan that would allow the youth organization to set up a $2.3 billion trust to settle decades’ worth of claims by more than 80,000 men who say they were abused as children by troop leaders, Reuters reported. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware, at a Thursday court hearing overruled remaining objections to the Boy Scouts' chapter 11 plan. She stopped short of approving it, however, instead asking for further revisions that the organization said could be completed relatively quickly. Boy Scouts' attorney Jessica Lauria acknowledged in court that it had some "work to do," but said that the remaining changes could be completed in less than a week. The Boy Scouts had sought confirmation of a modified chapter 11 plan that aimed to address Silverstein's July 29 ruling rejecting some parts of the plan. The biggest change was the removal of a $250 million settlement between the Boy Scouts and the Church of Jesus Christ of Latter-day Saints, which Judge Silverstein refused to approve because it went too far in protecting the Mormon church from abuse claims that were only loosely connected to scouting activities. Judge Silverstein overruled the remaining objections to the plan from insurers and sexual abuse claimants who argued that recent revisions went beyond the scope of Silverstein's July opinion. The insurers, for example, objected to a new assertion that the bankruptcy court's estimation of the value of abuse claims did not act as a limit on insurers' eventual liability for those claims.