%1

Veterans who claim that 3M Co's military-issue earplugs caused hearing damage are asking the judge overseeing their record-shattering mass tort litigation to block the company from offloading its liability onto a bankrupt subsidiary, Reuters reported. Two motions filed this week in Pensacola, Florida, federal court by plaintiffs in the multidistrict litigation made separate arguments over why the company could not escape the nearly 300,000 lawsuits by putting its Aearo Technologies subsidiary — the original maker of the earplugs, which 3M bought in 2008 — into bankruptcy. 3M has said it believes bankruptcy law allows for this strategy and has argued that the Indianapolis bankruptcy court can resolve the earplug claims more fairly than the MDL. "We are prepared to move forward and believe the applicable law supports our position," 3M said in a statement. Aearo filed for bankruptcy on July 26 and said it had committed $1 billion to resolve the earplug litigation. Out of the 16 trials in that litigation to date involving 19 service members, plaintiffs have won 10, with about $265 million in combined awards to 13 plaintiffs.

A Texas jury ordered the conspiracy theorist Alex Jones on Friday to pay the parents of a child killed in the 2012 Sandy Hook school shooting $45.2 million in punitive damages for spreading the lie that they helped stage the massacre, the New York Times reported. The jury announced its decision a day after awarding the parents more than $4 million in compensatory damages and after testimony on Friday that Jones and Free Speech Systems, the parent company of his misinformation-peddling media outlet, Infowars, were worth $135 million to $270 million. Jones was found liable last year for defaming the victims’ families while spreading bogus theories that the shooting had been part of a government plot to confiscate Americans’ firearms and that the victims’ families had been complicit in the scheme. Last week’s trial was the first of three to determine how much Jones owes the families for the suffering he has caused, and the size of the award is sure to be contested. Jurors deliberated for about four hours before reaching Friday’s verdict.

Embattled lending platform Celsius has withdrawn its motion to bring back ex-CFO Rod Bolger at $92,000 a month, prorated over a period of at least six weeks, according to a court document filed in the Southern District of New York on Friday, CNBC.com reported. The notice of withdrawal came just ahead of a hearing scheduled for Monday to review it. While Bolger worked full-time with the company as CFO, the original motion shows that he had a base salary of $750,000 and a performance-based cash bonus of up to 75% of his base, in addition to stock and token options, bringing the top of his total income range to around $1.3 million. The filing also indicated that Bolger is technically still on the company’s payroll. The decision to dismiss the motion came three days after CNBC first reported on the request to enlist the help of Bolger as a consultant during the bankruptcy process. It also follows a formal objection submitted by Keith Suckno, a CPA and Celsius investor who challenged the move by Celsius, alleging that “little detail” was given for why Bolger’s services were necessary to the bankruptcy proceedings. In the original motion, Celsius said it needed Bolger to help it navigate the bankruptcy proceedings as an advisor, “because of Mr. Bolger’s familiarity with the Debtors’ business.” It went on to say that during Bolger’s tenure, he led efforts to steady the business during turbulent market volatility this year, guiding the financial aspects of the business and acting as a leader of the company. Bolger, a former CFO for Royal Bank of Canada and divisions of Bank of America, was previously with Celsius for five months before resigning on June 30, about three weeks after the platform paused all withdrawals.

A $300,000 New York Department of Environmental Conservation grant will help keep a former Boy Scout camp in Lewiston from being developed, the Buffalo News reported. The Town of Lewiston, N.Y., will use the grant award announced this week to assist in its purchase of Camp Stonehaven, a 66.9-acre forested property the Greater Niagara Frontier Council of the Boy Scouts of America put on the market last year to help pay for its share of a proposed settlement in federal bankruptcy court for childhood sexual abuse victims. Lewiston town officials voted in March to sign a purchase agreement for the camp for $665,000, with plans to turn it into a nature preserve. The Council in May also sold Camp Schoellkopf in Wyoming County for $2.6 million. Lewiston Town Supervisor Steve Broderick said the town is waiting for word on whether it will also get a $319,000 Greenway Ecological Grant from the New York Power Authority before closing on the Boy Scout property. The Boy Scouts of America bankruptcy case has yet to be finalized, but 252 local councils have agreed to contribute a combined $519.6 million, plus a promissory note of about $100 million, toward a $2.7 billion settlement trust for more than 80,000 abuse victims. The Greater Niagara Frontier Council’s share of the settlement is pegged at $1.5 million.

Cryptocurrency brokerage firm Voyager Digital Holdings Inc. secured approval to return $270 million in customer cash, settling one of the larger issues it faced after filing for bankruptcy, WSJ Pro Bankruptcy reported. Judge Michael Wiles of the U.S. Bankruptcy Court in New York, who is overseeing Voyager’s bankruptcy, ruled yesterday that the company provided “sufficient basis” to support its contention that customers should be allowed access to the custodial account held at Metropolitan Commercial Bank. Voyager had about $270 million in the account when it filed for bankruptcy, the bank has said. The chapter 11 filings of Voyager and nonbank lender Celsius Network LLC have tied up the holdings of their customers, who are realizing how little control they have over their funds and that they aren’t likely to recover in full through bankruptcy court. Voyager sought bankruptcy protection a month ago after facing a “run on the bank” as customers flooded the firm with requests to withdraw their deposits triggered by the sharp drops in cryptocurrency prices of recent months. In recent weeks, Voyager has asked for the bankruptcy court’s permission to honor customer withdrawal requests for cash funds held in custody at New York-based Metropolitan Commercial Bank, but it said the roughly $1.3 billion in digital assets on Voyager’s platform belongs to the bankruptcy estate that will be shared by all creditors, with the distribution to be decided through the bankruptcy proceeding.

A Texas jury Thursday ordered conspiracy theorist Alex Jones to pay more than $4 million — significantly less than the $150 million being sought — in compensatory damages to the parents of a 6-year-old boy killed in the Sandy Hook massacre, marking the first time the Infowars host has been held financially liable for repeatedly claiming the deadliest school shooting in U.S. history was a hoax, the Associated Press reported. The Austin jury must still decide how much the Infowars host should pay in punitive damages to Neil Heslin and Scarlett Lewis, whose son Jesse Lewis was among the 20 children and six educators who were killed in the 2012 attack in Newtown, Connecticut. The parents had sought at least $150 million in compensation for defamation and intentional infliction of emotional distress. Jones’ attorney asked the jury to limit damages to $8 — one dollar for each of the compensation charges they considered — and Jones himself said any award over $2 million “would sink us.” It likely won’t be the last judgment against Jones — who was not in the courtroom — over his claims that the attack was staged in the interests of increasing gun controls. A Connecticut judge has ruled against him in a similar lawsuit brought by other victims’ families and an FBI agent who worked on the case. He also faces another trial in Austin. Jones’ media company Free Speech Systems, which is Infowars’ parent company, filed for bankruptcy during the two-week trial.

The Roman Catholic Diocese of Harrisburg said yesterday that it has reached an agreement to settle any still-pending historic child sex abuse claims lodged against its priests or other church personnel as part of a plan to end the diocese’s chapter 11 reorganization under federal bankruptcy laws, PennLive.com reported. Final terms of the settlement were not immediately available Thursday night, including the total cost of all payments to creditors. But in a press release, the diocese said the proposed agreement with its creditors calls for creation of a $7.5 million Survivor Compensation Trust to provide financial restitution for survivors of clergy sexual abuse. The fund may also be enlarged through future settlements with diocesan insurance carriers, the church noted. The church said approximately 54 timely filed proofs of claim from clergy abuse survivors were received during the bankruptcy process. That appears to be in addition to 111 survivors separately paid in 2019 by the diocese’s independent Survivor Compensation Program, for a total financial commitment of $12,784,450. The average payout to those accepting the Harrisburg diocese’s offers in that program was about $114,000.

Credit Suisse is among the lenders owed the most money by embattled Mexican finance company Credito Real, which has begun bankruptcy proceedings for $2.6 billion in debts, Reuters reported. Private documents show that Credit Suisse is owed over $100 million by Credito Real, according to a report from Mexican business paper El CEO. That would be the largest debt Credito Real owes to a foreign bank, the report said. The news comes as media have reported that Credit Suisse was considering making sweeping cuts, and after Moodys rating agency downgraded the bank's unsecured debt ratings. Mexico's national development bank, NAFIN, is owed the most of any entity, with $119 million in unpaid debts, according to El CEO. NAFIN didn't immediately respond to a request for comment. Credito Real announced it was beginning bankruptcy proceedings in July after defaulting earlier in the year.

Insurers are fighting against sex-abuse victims’ demands for more compensation in the bankruptcies of several large Catholic dioceses, as both the number of claimants and the proposed payouts have grown, WSJ Pro Bankruptcy reported. The standoff is slowing the dioceses’ efforts to emerge from chapter 11. Historically, most settlements in such bankruptcies have received support from the diocese, its insurers and abuse victims, said lawyer Jason Amala, who has represented victims of childhood sex abuse in cases involving the Catholic Church and the Boy Scouts of America, among others. What is different now, lawyers involved in diocese cases said, is that many more victims have come forward after more than a dozen states in the past few years relaxed their statutes of limitations on sex-abuse claims, opening temporary look-back windows during which abuse victims could sue even if the abuse happened decades ago. In addition, victims are seeking bigger settlements than in earlier diocese bankruptcies, prompting insurers to fight harder against covering abuse liabilities at these higher levels, lawyers involved in diocese cases said. Sex-abuse lawsuits against the Catholic Church have tipped dozens of dioceses into bankruptcy over the past two decades as they sought to protect church assets from abuse claimants and resolve large numbers of individual claims at once through chapter 11 plans. New York and New Jersey both opened two-year look-back windows for sex-abuse victims in 2019, unleashing waves of abuse litigation in those states. Since then, four dioceses in New York have filed for bankruptcy — Buffalo, Rochester, Syracuse and Rockville Centre on Long Island — as has the diocese in Camden, N.J. Tensions between insurers and victims’ representatives have dominated most of these cases, driving up legal fees and prolonging the dioceses’ stints in bankruptcy, lawyers involved in the cases said.

Parents of children killed in the 2012 Sandy Hook school massacre urged a U.S. bankruptcy judge on Wednesday not to allow the parent company of far-right website InfoWars to send any money to its founder, conspiracy theorist Alex Jones, or his companies until they have an opportunity to get to the bottom of InfoWars' finances, Reuters. reported. As a jury deliberates in Austin, Texas, over how much Jones must pay two parents for his false claims that the deadly shooting was a hoax, families of Sandy Hook victims who have sued Jones for defamation in that trial and others who have sued in Connecticut warned a bankruptcy judge in Houston that Jones might continue to pull assets from InfoWars parent company Free Speech Systems LLC while using its bankruptcy case to avoid paying court judgments in the defamation cases. Marty Brimmage, an attorney for the Sandy Hook parents, told U.S. Bankruptcy Judge Christopher Lopez in Houston yesterday that Jones had told his audience that the bankruptcy would "tie up" any defamation judgment for years. Judges in the Texas and Connecticut cases have already found Jones liable for defamation. The parents in the Texas trial are seeking a judgment of $150 million. Jones testified Wednesday in Austin, admitting that the Sandy Hook shooting was real and that it was "crazy" of him to call it a hoax.