%1

Johnson & Johnson's worldwide vice president for litigation said yesterday that the company has recently reached settlements with several law firms over their clients' claims that J&J talc products caused cancer, Reuters reported. The settlements were reached "with a goal to facilitate our pursuit of a consensual prepackaged bankruptcy resolution," Erik Haas said on an investor call. It was not clear whether the deals have been finalized. J&J said in October that it was considering a new bankruptcy filing to resolve talc claims. Courts have rejected its two previous attempts to resolve talc litigation through bankruptcy, most recently a proposed $8.9 billion deal. Haas said that the recent settlements covered cases involving plaintiffs with mesothelioma, a type of cancer linked to asbestos, but did not provide any details about the dollar amounts involved or say how many people they covered. He said the company had resolved all but one of the cases scheduled for trial in 2023, "significantly curtailed" trials in 2024 and did not require the company to record any new charges against earnings. Bloomberg reported earlier yesterday that J&J had reached settlements covering about 100 people.

Enforcement action against crypto firms may have peaked after last month's $4.3 billion settlement with Binance, as such cases provide companies with a "template" for how they should be governed, a senior U.S. regulator said on Tuesday, Reuters reported. Binance's settlement with the Commodity Futures Trading Commission (CFTC) and Treasury Department, negotiated by the Justice Department, was for breaking U.S. anti-money laundering and sanctions laws. U.S. regulators have brought several cases against crypto firms such as Binance, helping to establish "guardrails" to bring "order and structure" to the market, CFTC Commissioner Kristin Johnson told an FT crypto and digital assets summit. "My hope would be that we have seen a spike, and what we will see going forward is that these early cases will really be a bit of cautionary tale for those firms that really do want to successfully operate in this ecosystem," Johnson said. She urged crypto firms to study the Binance settlement to see what sort of governance regulators look for at crypto firms.

Trucking company XPO Inc. won a bid to buy 28 service centers of bankrupt Yellow Corp for $870 million in a closely watched auction of the nearly 100-year-old firm's assets, Reuters reported. Yellow, formerly known as YRC, filed for chapter 11 bankruptcy protection in August after blaming the International Brotherhood of Teamsters union for its demise. The company was one of the nation's largest so-called less-than-truckload carriers in the U.S. and owned about 12,000 trucks and 35,000 trailers and its customers included Walmart and Home Depot. XPO expects the deal, which is subject to court approval, to add to core profit in 2024 and adjusted profit per share from continuing operations from 2025, according to a filing on Tuesday. The deal will add "significant footprint in areas where XPO was previously capacity constrained, the path towards the company's 2027 goals," said Jonathan Chappell, analyst at Evercore ISI. The company has also entered into an $870 million credit agreement which it may use to finance a deal it said would help optimize routes for its less-than-truckload transportation in North America.

Van’s Aircraft has filed for chapter 11 protection while it reorganizes with the goal of maintaining existing services and emerging as a solvent company again, AVWeb.com reported. In a statement posted on Monday, Van’s tried to assure owners of 10,000 finished aircraft, builders and future customers the company has a future. “During this period of reorganization, we will continue to source, produce, and provide parts, service, and support to our customers. We will also be crating and shipping kit orders,” the company said. The company blamed a maelstrom of issues for the decision, which was made about a month after company founder Dick Van Grunsven announced the company was pausing certain functions while it addressed a serious cash flow crisis. Two separate quality control issues, along with an imbalance of orders and deliveries due to COVID, led to the crisis.

The ownership entity for the Gastonia Honey Hunters baseball team has filed for bankruptcy, the Charlotte Business Journal reported. On Dec. 1, NC Gas House Gang LLC, which is led by Brandon Bellamy, filed for chapter 11 reorganization in Maryland bankruptcy court. Court filings show the entity's total liabilities are nearly $4.1 million. The chapter 11 filing comes after the team's financial woes surfaced in recent months. Gastonia sued NC Gas House Gang last month to end its agreement with the Honey Hunters for the use of the city-owned CaroMont Health Park. The Honey Hunters also have been dropped by the Atlantic League of Professional Baseball. Creditors in the case claim they are owed money for a range of expenses including taxes, payroll, league expenses and more. Each of the 20 largest creditors in the case has claims listed as disputed, court records show. NC Gas House Gang's list of creditors includes the N.C. Department of Revenue, which has a claim of $140,000 for taxes owed. The Department of the Treasury/IRS is also listed as a creditor with a claim for taxes totaling $126,402.72.

The Supreme Court justices seemed divided yesterday over a fiercely contested bankruptcy settlement for Purdue Pharma that would funnel billions of dollars into addressing the opioid epidemic in exchange for shielding members of the wealthy Sackler family from related civil lawsuits, the New York Times reported. The U.S. Trustee Program, an office in the Justice Department, had challenged the deal, saying that it violated federal law by guaranteeing such wide-ranging legal immunity for the Sacklers even as they themselves had not declared bankruptcy. Questions from the justices reflected why the agreement, which pits money against principle, has drawn intense scrutiny to start. Under debate was the practical effect of unraveling the settlement, painstakingly negotiated for years, and broader concerns over whether releasing the Sacklers from liability should be allowed. “The opioid victims and their families overwhelmingly approve this plan because they think it will ensure prompt payment,” Justice Brett M. Kavanaugh said. He asked why the government was pushing to end a tactic, known as third-party nonconsensual releases, that has figured in settlements approved over “30 years of bankruptcy court practice.” The lawyer for the government, Curtis E. Gannon, acknowledged the tension, but he argued that the U.S. trustee “has been given this watchdog role” and that a ruling for the government would not foreclose an opioid deal with the Sacklers. Although the question before the court was a narrow one — whether the Bankruptcy Code allowed such nonconsensual third-party waivers — the deal’s effect on a public health crisis that has left tens of thousands of people dead was on full display. While Justice Kavanaugh and others repeatedly questioned what any ruling would mean for victims of the opioid crisis and their families, others asked what consequences there would be for other settlements, including sexual abuse lawsuits against the Boy Scouts of America and the Catholic Church, that have included this release of liability.

Recycled glass supplier Strategic Materials Inc. has filed for bankruptcy after being squeezed by higher interest rates and increased competition, Bloomberg News reported. The Houston-based company, which is backed by private equity firm Littlejohn & Co., has around $433 million of funded debt liabilities, according to court papers. During the restructuring, the company said it plans to operate without disruption. Strategic Materials’ funded debt became “significantly more expensive” following the rapid increase in central bank interest rates, squeezing liquidity, Chief Financial Officer Paul Garris said in a court filing. At the same time, new entrants to the market and post-pandemic shifts in consumer habits have challenged company operations. Under the restructuring plan, the company will be handed over to certain creditors in a debt-for-equity swap which will see the balance sheet delevered by over $300 million. The decision to file for chapter 11 followed a failed out-of-court sales process. Existing lenders plan to provide $23 million to allow Strategic Materials to continue to meet obligations while restructuring the business, subject to court approval. “We play a critical role for the customers and communities we serve,” Chief Executive Officer Chris Dods said in a statement. “The past several years presented significant operational and financial challenges, requiring a comprehensive restructuring of the balance sheet.” The company noted that its Canadian and Mexican based operating affiliates are not part of the chapter 11 bankruptcy process.

Yellow is set to raise more than $2 billion after a bankruptcy auction that will disperse much of its national network of truck terminals among rivals, casting deeper doubt on a long shot bid to revive the trucker, WSJ Pro Bankruptcy reported. About a dozen trucking companies bought properties at a court-supervised auction that unloaded 75% of Yellow’s properties for a total of just under $1.9 billion, according to a filing Monday evening in the U.S. Bankruptcy Court in Delaware. The bids must be approved by the court, which is scheduled to hold a hearing Dec. 12. The remaining properties are expected to fetch hundreds of millions more and to be sold over the coming months, according to a person familiar with the process. The sales pushed further out of reach a trucking group’s bid to revive Yellow as a smaller, leaner carrier and to rehire thousands of employees. The bid includes $1.1 billion in financing and asks creditors, including the federal government, to push back repayment of some debts and to accept equity in the new business.

Johnson & Johnson is making a push to resolve lawsuits claiming its talc-based Baby Powder causes cancer linked to asbestos exposure to avoid facing some jury trials next year, Bloomberg News reported. A trio of law firms have reached agreements for settlements covering about 100 cases, said the people, who declined to be identified because they weren’t authorized to speak publicly. The financial size of the accords are being kept private, the people added. The deals may be mentioned Tuesday as part of J&J’s investor presentation at the New York Stock Exchange if company officials update shareholders about the plan for corralling the decade-long talc litigation, the people said. The session’s main focus is the company’s long-term growth outlook and product pipeline. The company is striving to find a way to resolve all current and future baby powder cases after a judge nixed its attempt to settle them for $9 billion as part of a unit’s bankruptcy filing. The deals are part of the manufacturer’s multi-pronged strategy to deal with the lawsuits, which have created a drag on its shares.

The Supreme Court today will delve into the intricacies of bankruptcy law when it hears oral arguments about the controversial deal regarding Purdue Pharma, the former manufacturer of prescription painkiller OxyContin, The Hill reported. The company filed for bankruptcy in 2019 as it faced thousands of lawsuits in connection with the opioid crisis, as it was accused of downplaying the risks of Oxycontin and illegally marketing the drug. Under the bankruptcy reorganization plan, members of the wealthy Sackler family, who controlled Purdue Pharma, would contribute up to $6 billion to the settlement in exchange for being released from civil liability. But the Sacklers involved in the company did not personally file for bankruptcy themselves. They divested themselves of ownership of the company, and Purdue reorganized into a public-benefit company, with profits going to fighting the opioid crisis. The $6 billion would be contributed over the course of a decade, and the family admitted no wrongdoing. Under the so-called “third party release,” neither the Sacklers nor their associates could ever be sued in relation to Purdue and Oxycontin. The liability release has been a major sticking point, though about 95 percent of creditors — which include personal injury victims, states and various governmental entities, among others — voted to approve the plan, court filings show. The settlement was approved by a bankruptcy judge, but the U.S. Trustee Program, a component of the Justice Department that serves as a watchdog in bankruptcy cases, objected. The possibility that none of the Sackler family members involved in the company could face any liability for the opioid crisis has generated public outrage. The Justice Department argued that the bankruptcy court did not have the authority to release the Sackler family members from the claim. In August, the Supreme Court paused the bankruptcy settlement on an emergency basis as the justices agreed to take up the case in full. Read more.

To listen to the live oral argument today starting at 10 a.m. ET, please click here.