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Questions remain about the pension funds of Colstrip employees as Colstrip operator and co-owner Talen Montana enters bankruptcy, the Billings Gazette reported. Talen Montana, in a lawsuit separate from its May 9 bankruptcy filing, says it’s still owed hundreds of millions of dollars from Talen’s Colstrip predecessor, PPL, and lacks adequate funds to cover pension and environmental remediation obligations. The lawsuit reiterates claims first made in a 2018 class action lawsuit filed by the Talen Montana Retirement Plan and Talen Energy Marketing in Rosebud County. The pension fund isn't fully financed, Talen confirmed Wednesday, though it expects it will be by 2025. Talen claims that PPL wrongfully took $733 million of the net proceeds from the sale of its Montana hydroelectric dams before spinning off its coal power properties to Talen Montana in 2015. PPL sold its Montana hydroelectric dams to NorthWestern Energy in 2014.

Aphex BioCleanse Systems, Inc. filed a voluntary petition under subchapter V on May 12 in the U.S. Bankruptcy Court for the Middle District of Florida in Tampa, according to a company press release. The company said that the filing was precipitated by the litigatory actions of certain former directors and officers that have damaged the business integrity of the company and endangered the company’s shareholders, as well as inhibiting the ability of the company to raise working capital and market its products. The actions of these persons have included illegal and unfounded filings in Nevada, and numerous erroneous and illegal emails and communications designed to misinform company shareholders and distributors. This includes the former CEO and chairman executing false documents impersonating the CEO and other officer titles of the company months after being terminated for cause.

Endo International PLC has started negotiations with its lenders and senior bondholders about a possible restructuring of more than $8 billion in debt as the drugmaker faces litigation over opioid sales, WSJ Pro Bankruptcy reported. Lenders initiated the discussions after the pharmaceutical company reported a sharp drop in quarterly earnings earlier this month stemming from the loss of exclusive rights over a key drug. Endo, which faces about 3,500 lawsuits from state and local governments and healthcare providers over claims that it helped fuel the opioid addiction epidemic, has been warning of the risk of a bankruptcy filing in its regulatory disclosures since last year. Gibson, Dunn & Crutcher LLP, a law firm representing the lenders, has entered confidential discussions with the company, although the lenders haven’t yet signed confidentiality agreements to be able to view proprietary information. The company, which has reached settlements with a handful of state and local governments over opioid liabilities, faces thousands more lawsuits it hasn’t resolved. Endo, which is domiciled in Ireland following a 2014 corporate tax inversion and has operations in Malvern, Pa., this month reported a drop in first-quarter earnings that pushed down the prices on its loans and bonds.

The Williamsburg Hotel went on trial in bankruptcy court as a top lender tries to install a chapter 11 trustee to oversee the bankrupt Brooklyn, N.Y., property, arguing the owner-developers running the business can’t be trusted, WSJ Pro Bankruptcy reported. Mortgage lender Benefit Street Partners LLC is seeking to appoint an independent trustee at the 147-room hotel following reports by a court-appointed examiner that its developers, Toby Moskovits and Michael Lichtenstein, siphoned off cash from the business, which they deny. The lender has questioned the movement of money between the hotel holding company 96 Wythe Acquisition LLC, a separate management company controlled by the developers and other affiliated entities. At trial on Tuesday in the U.S. Bankruptcy Court in White Plains, N.Y., the hotel’s director of finance, Jeremy Rauch, testified that his accounting team kept track of numerous fund transfers among those entities by using another affiliate called Northside Management LLC as a “clearing entity.” The developers often moved around funds as “lines of credit,” according to Mr. Rauch. And even though the transactions weren’t documented, Mr. Rauch said he was able to reconcile them by using the Northside account records. “They were trying to keep the hotel afloat. They’re trying to put in whatever was necessary to get the hotel running and operating,” Mr. Rauch said. “It was just whatever it takes to make it happen.” Mr. Rauch agreed when Judge Robert Drain, who is overseeing the chapter 11 case, asked if the developers moved the money around because they thought “it was all in the family.”

The Archdiocese of Santa Fe and representatives for church clergy sex abuse survivors announced agreement Tuesday on a $121.5 million fund to compensate hundreds of adults who contend they were subjected to childhood sexual abuse by priests and other clergy dating back decades, the Albuquerque Journal reported. The announcement in U.S. Bankruptcy Court in Albuquerque kicked off a new phase of the 41-month-old chapter 11 reorganization sought by the archdiocese to stem financial losses from continuing legal claims that it failed to protect children from pedophile priests and other clergy assigned to schools and parishes. Still to come is the allocation process of deciding how much to pay each of the 394 or so claimants. The next step would be for the claimants to vote on the reorganization plan. The archdiocese was facing about 36 lawsuits alleging clergy abuse when Archbishop John C. Wester announced the bankruptcy filing in 2018, saying he hoped it would help provide a fair and equitable settlement with survivors. The bankruptcy put the pending civil cases on hold. Of the 29 Catholic dioceses or religious orders to file for bankruptcy protection in the past 20 years, the Archdiocese of Santa Fe’s proposed settlement would be among the largest monetary payouts to survivors, with the Archdiocese of St. Paul and Minneapolis, the San Diego Diocese, and a Jesuit religious order in Portland, Oregon, paying higher amounts. The Archdiocese of Santa Fe case also has one of the largest number of claimants alleging sexual abuse. Money for the settlement comes from the proceeds of archdiocese sales of property and other assets, contributions from parishes in the archdiocese, and insurance proceeds.

KKR & Co.’s Envision Healthcare Inc. is in discussions with lenders about including them in a follow-up transaction to a debt exchange that stripped their collateral rights to a roughly $2.5 billion corporate asset, WSJ Pro Bankruptcy reported. Envision and its advisers are speaking with lenders that were left out of the debt exchange last month, saw the value of their holdings plummet as a result and may now be interested in tendering their loans for new debt, likely at a discount to face value. The discussions come after the company shifted its ambulatory services unit AmSurg Corp. out of the reach of term lenders owed roughly $3.5 billion and used the asset to secure $2.6 billion in new loans. Envision and KKR declined to comment. The company is now exploring another deal covering the left-out lenders that could swap their holdings for new debt backed once again by AmSurg on a first- or second-lien basis, people familiar with the matter said. Envision also could issue new debt at the core subsidiary where the original loans currently sit. Last month’s debt deal, led by outside investors Centerbridge Partners LP and Angelo Gordon & Co., helped Envision cut down debt and raise cash to weather business headwinds. Other private-equity-backed companies have engineered similar deals in recent years to free up collateral for new investment. Some have been challenged in court, though most have ended in negotiated settlements.

The process to sell a historic Manhattan property that houses an off-Broadway theater venue should be overseen by an independent bankruptcy trustee instead of its owner, a judge ruled, WSJ Pro Bankruptcy reported. The property owner, 78-80 St. Marks Place LLC, sought chapter 11 protection from creditors in December, before the expiration of a forbearance agreement on a defaulted loan. Last month, mortgage lender Maverick Real Estate Partners LLC alleged mismanagement and self-dealing at the property, which also houses a tavern and a gangster museum, and asked that an independent trustee be named to oversee its financial restructuring. Bankruptcy Judge Martin Glenn yesterday rejected a request by property lawyer Andrew Gottesman that the business be allowed to run its own sale process, as is common in reorganizations, with help from a real-estate broker. Judge Glenn ordered that a chapter 11 trustee be named. Lawrence Otway, the owner of 78-80 St. Marks Place LLC, who oversees the businesses of Theatre 80, William Barnacle Tavern and the Museum of the American Gangster, told the court Tuesday that private property shouldn’t be seized without “just compensation.” “I beg the court not to destroy” decades of work and endanger his ability to support his family, Mr. Otway said. A “predatory” company shouldn’t be able to make a “predatory” profit during the COVID-19 pandemic, in the process depriving the community of a cultural resource, he said. The property has struggled since COVID-19, with its 2020 gross revenue falling to roughly $106,000 amid pandemic restrictions, court records show, down from about $800,000 a year before the pandemic. The property owner said it failed to refinance its mortgage loan ahead of a debt maturity due in December 2020.

A bankruptcy judge approved a $610 million asbestos-injury compensation plan covering O-I Glass Inc., freeing it from legacy asbestos liabilities that it isolated from its glassmaking business and pushed into chapter 11, WSJ Pro Bankruptcy reported. O-I’s Paddock Enterprises LLC developed a bankruptcy plan backed by representatives for current and future asbestos claimants, “a result that nobody can have any issue with,” said Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del. The bankruptcy plan relies on funding from the parent company’s Owens-Illinois glassmaking business to compensate individuals who allege they were exposed to asbestos from a corporate predecessor’s Kaylo insulation products. O-I used a Delaware corporate reorganization to fill Paddock with asbestos liabilities before placing it in bankruptcy, isolating them from the rest of the business. That allowed O-I to drive a resolution of the asbestos claims in bankruptcy, while keeping the valuable glassmaking operation out of chapter 11. The Delaware reorganization that landed Paddock in bankruptcy “of course raised the antennae of everyone who was in the courtroom,” Judge Silverstein said from the bench on Monday. But the resulting bankruptcy plan pays injury claims at 100 cents on the dollar, she said.

Armstrong Flooring Inc. paid its top executives $4.8 million just before filing bankruptcy, a move that was questioned by lenders, Bloomberg News reported. Company Chief Executive Officer Michel S. Vermette and at least four other managers got part of their annual incentive payments early in order to try to keep them on the job, according to court papers and regulatory filings. Such payments have come under fire from Congress, creditors and employees, who say the companies are evading bonus restrictions that judges can impose once in bankruptcy. A federal report found that in one recent year, 42 companies paid out $165 million just before filing bankruptcy. Initially, the bonuses threatened to disrupt the company’s plan to borrow $30 million to fund its reorganization. Armstrong lender Pathlight Capital had opposed the new loan arguing it was inappropriate, in part because the money would be used to “essentially replenish” cash the company paid the executives. On Monday, Pathlight dropped its objections to the proposed reorganization funding when Armstrong agreed to change the financing package, Armstrong attorney Ron E. Meisler said during a court hearing held by video. Under the new financing agreement, Armstrong will borrow $24 million, half of which will be a term loan that will include Pathlight as administrative agent, according to court documents.