An Erie County jury has awarded $25 million to a 62-year-old retiree who was sexually abused as a boy by his Boy Scout leader, in what may be the first jury verdict in the state for a Child Victims Act lawsuit, the Buffalo News reported. The jury of three men and three women decided Wednesday that Robert L. Eberhardt, a twice-convicted former Scout leader who lives in Arcade, Wyoming County, should pay $15 million for pain and suffering to the plaintiff and $10 million in punitive damages. Eberhardt, 80, did not appear in court to defend himself. He was found liable for the abuse in 2021 in a default judgment by State Supreme Court Justice Mark Grisanti, who presided at the jury trial for damages. The plaintiff, an Erie County husband and father of three identified in court papers and in the courtroom as LG 40 Doe, wiped tears from his eyes and shifted uncomfortably in his seat while recounting details of the abuse that began when he was a 10-year-old Scout in a Cheektowaga troop where Eberhardt was the Scout leader. The plaintiff’s attorney, Amy Keller, had asked the jury to consider a $15 million award, with $10 million for pain and suffering and $5 million in punitive damages. The jury deliberated for less than 40 minutes before delivering its unanimous decision.
Rocking M Media and its associated companies that own 21 stations in central and western Kansas has filed for chapter 11 protection, Radio Insight reported. In the petition Rocking M claims $1,307,696.75 in assets and $22,365,886.40 in liabilities owed between its four holding companies. Bankruptcy attorney Sharon Stolte of Sandberg Phoenix & von Gontard, who is representing the company, told the Wichita Eagle that “We filed on Saturday, and we are hoping to reorganize. We will sell some of the stations that we find are not profitable, and we will reorganize the debt with the remaining stations.” The company is owned 1/3 each by Monte and Doris Miller and their son Christopher Miller. In its declaration the company blamed Christopher Miller for rapid expansion. He was removed from his position as company president in 2019, at which time he acquired four stations in its Salina cluster for the assumption of a $1,755,917.55 note.
MD Helicopters Inc., an Arizona helicopter maker backed by financier Lynn Tilton, filed for bankruptcy protection, agreeing to sell itself out of chapter 11 to creditors of her bankrupt Zohar loan funds, WSJ Pro Bankruptcy reported. MD is among the dozens of businesses once run by Ms. Tilton that borrowed from the Zohar funds, collateralized loan obligations she created to channel $2.5 billion in investor capital into her turnaround efforts. Many of the businesses shut down, went bankrupt or fell behind on their debts to the Zohar vehicles, which she placed in chapter 11 in 2018 after they defaulted on their own obligations to investors. MD owes $357 million in first-lien secured debt, $332 million of it to the Zohars and $25 million to Ms. Tilton’s Patriarch Partners, according to court papers filed yesterday. Another $59.8 million in subordinated debt is also outstanding to the Zohars and Patriarch, MD’s Chief Financial Officer Barry Sullivan said in a sworn declaration. Bardin Hill and MB Global Partners have agreed to supply a $60 million loan to finance MD through its stay in chapter 11. MD’s operations will continue as normal during the sale process, the company said yesterday. MD enters chapter 11 as the Zohar funds are nearing a possible exit from bankruptcy. A liquidation plan proposed by their administrators would hand their remaining assets to her longtime legal adversaries MBIA, Bardin Hill and other fund investors.
The Boy Scouts of America’s sexual abuse compensation fund may force insurers to make payments they can’t negotiate over, even if the claims are fraudulent, a group of the companies argued in court, Bloomberg News reported. Insurers, including American International Group, Liberty Mutual Insurance and Travelers Casualty and Surety, began their case against the biggest-ever compensation fund for abuse victims by presenting an academic on Tuesday who argued the plan creates a “moral hazard” for insurers. Proposed rules for paying victims take away the right of insurance companies to defend themselves and remove any incentive for the Boy Scouts to fight for reduced payout, said Scott Harrington, a professor of insurance and risk management at the University of Pennsylvania’s Wharton School. Insurers were excluded from a key round of negotiations in which the plan was put together by the Boy Scouts and advocates for as many as 82,000 sex-abuse victims, Harrington told U.S. Bankruptcy Judge Laurie Silverstein during the trial, which is being held by video.
The U.S. bankruptcy system is facing a backlash from all three branches of the federal government as big companies and wealthy individuals push the limits of chapter 11 to relieve themselves of legal and financial liabilities, the Wall Street Journal reported. The pushback stems in part from the continuing bankruptcy of Purdue Pharma LP, the OxyContin maker that filed for chapter 11 to resolve mass lawsuits alleging that the company and its owners, members of the Sackler family, helped fuel opioid addiction. The Justice Department and some members of Congress have said the bankruptcy case was misused to benefit the Sacklers at the expense of people who became addicted, while a federal judge last year overturned Purdue’s proposed settlement to provide the family with sweeping protection from civil opioid litigation. Other companies, such as former Ann Taylor owner Ascena Group Inc., also tried to use bankruptcy to protect insiders from litigation over alleged corporate wrongdoing. Johnson & Johnson has accessed the bankruptcy system to shield its profitable business assets from lawsuits alleging its talc-based baby products caused cancer. For decades, corporations have been using chapter 11 to break burdensome contracts, shed unsustainable debt and resolve litigation. Now, lawyers are turning the same tools on a new class of legal adversaries, namely individual claimants who allege they were harmed by dangerous products or other corporate malfeasance, said Steven Rhodes, a former judge who oversaw the city of Detroit’s bankruptcy. In particular, the bankruptcy cases filed by Purdue and J&J to protect themselves from opioid addiction and talc-related lawsuits have “brought to light the injustice and unfairness of it,” Mr. Rhodes said. The U.S. Trustee has been lodging objections and appeals in response to new efforts by companies and their advisers to push the limits of what chapter 11 enables them to do, according to the office’s director. Clifford White, who has served as director since 2006, said companies and advisers “have been testing the boundaries of the bankruptcy code. We think that there has been overreaching in how the bankruptcy code is used.” Some higher courts have agreed. In December, a federal judge in New York overturned a roughly $4.5 billion settlement in the Purdue case that would have shielded the Sackler family from civil legal liability tied to the opioid crisis. Read more. (Subscription required.)
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A running battle with insurers may prolong a resolution to the Archdiocese of Santa Fe’s clergy sex abuse bankruptcy case, the Santa Fe New Mexican reported. The chapter 11 bankruptcy, involving about 400 victims, has plodded on for nearly 3½ years. The archdiocese and four insurance companies are now ensnared in a legal confrontation of their own, one that has thrown a difficult twist into the high-profile case. At issue is how big a share of a proposed settlement with victims the insurance companies should pay. Insurers’ participation is expected to be a vital element in the effort to settle with the victims. The delay in reaching a settlement between the archdiocese and victims has significant financial implications: Bankruptcy court records show the archdiocese has spent $5.7 million on professional fees in the case, including payments for lawyers and financial advisers. It’s a sum that will rise if the proceedings drag on. Attorneys met on Friday with U.S. Bankruptcy Judge David Thuma for a status conference, with mediation scheduled to continue today and Tuesday.
Hycroft Mining Holding Corp. has raised roughly $140 million by selling new shares since cinema giant and meme-stock favorite AMC Entertainment Holdings Inc. bought its own stake in the gold miner earlier this month, WSJ Pro Bankruptcy reported. Hycroft launched an at-the-market stock offering on March 15 after announcing that AMC and a prominent precious-metals investor, Eric Sprott, had each committed to put $28 million into the company. Combined with the proceeds from the stock offering and the investments of AMC and Mr. Sprott, the company has raised about $196 million. Hycroft did not immediately respond to requests for comment. Hycroft was on the verge of bankruptcy last month, down to just $8 million of cash on its balance sheet because it hadn’t obtained sufficient financing to build a mill it needed to economically mine its ore. But the company, which owns a more than 70,000-acre gold and silver mine in northern Nevada, caught the attention of meme-focused individual investors after Russia’s invasion of Ukraine last month. The ensuing sanctions and geopolitical instability caused metals prices to soar, spurring day traders to post on social media that Hycroft was an attractive bargain stock.
Black News Channel, a cable news network that went on the air two years ago to provide an alternative look at news from Black Americans’ perspective, is shutting down, the outlet’s chief executive told employees on Friday, the Wall Street Journal reported. “Due to challenging market conditions and global financial pressures, we have been unable to meet our financial goals, and the timeline afforded to us has run out,” Princell Hair, who has been chief executive since July 2020, wrote in a memo to staff. “Effective immediately, BNC will cease live production and file for bankruptcy.” Black News Channel’s abrupt closure comes just a year after the network revamped its lineup with high-profile commentators like Charles Blow and Marc Lamont Hill, and added a new morning show. It also shows the difficulties traditional cable-TV channels face as cord-cutting continues and consumers turn away from the channel dial. The network, which was co-founded by former Oklahoma congressman J.C. Watts, is largely backed by automotive-parts billionaire and Jacksonville Jaguars owner Shad Khan. Mr. Khan had explored a sale of some or all of the network in recent months, people familiar with the matter said. Mr. Khan, who has invested roughly $50 million in BNC, won’t invest any further, according to some of the people.
A Salem Harbor, Mass., power plant backed by Oaktree Capital Management LP filed for bankruptcy protection to weather a $236 million arbitration award to its former contractor and pursue a dual-track restructuring to either sell itself or hand control to lenders, WSJ Pro Bankruptcy reported. Footprint Power Salem Harbor Development LP has proposed handing over 100% of its equity interests to lenders owed $290 million or selling itself out of chapter 11 if a suitable buyer emerges, court papers said. The Oaktree-backed company owns a 674-megawatt natural gas-fired plant located along Salem Harbor that has been embroiled in lawsuits and arbitration proceedings since 2018 with its engineering and construction contractor, Iberdrola Energy Projects Inc. Construction delays pushed back the project’s opening by 11 months and caused the plant to terminate its contract with IEP in 2018, according to papers filed late Wednesday in the U.S. Bankruptcy Court in Wilmington, Del., by chief restructuring officer John Castellano. A different contractor finished the construction. IEP filed an arbitration claim over the termination and last year was awarded more than $236 million, damages that were confirmed by a New York state court in January. Combined with the amounts owed to secured lenders, the IEP award put the plant at “significant risk of an inability to satisfy its debts,” Mr. Castellano said in court papers.
A whirlwind March 23 bankruptcy court hearing concluded with embattled Austin real estate investor Nate Paul losing control of five legal entities — each of which controls valuable real estate — to a chapter 11 trustee, the Austin Business Journal reported. Another three entities were placed under the control of a chief restructuring officer who will help shepherd them through bankruptcy. In total, eight entities were placed under some level of independent stewardship — with one overarching goal: "I don't want Mr. Paul to have control of the cash, period," said U.S. Bankruptcy Judge Tony Davis. Paul and his firm World Class, which describes itself on its website as a "multi-billion dollar holding company" for real estate, have faced a series of lawsuits, bankruptcies and foreclosures in the wake of a 2019 raid of its Austin headquarters by federal investigators. Though no charges have yet resulted from the raid, the company's "business reputation was severely damaged, and their business affairs were severely compromised," Paul alleged in a lawsuit filed against the FBI in October. The latest court actions were partially in response to a series of unexplained transfers out of company bank accounts. Casey Roy, a representatives from the U.S. Trustee's office, argued in at least one instance in favor of converting the case into a chapter 7 bankruptcy, which typically results in a liquidation of assets. Regarding a shell company called WC Met Center LLC, which owns roughly 48.5 acres in Southeast Austin most recently valued for tax purposes at more than $68 million, Roy said recent transfers appeared to show about $800,000 being moved out of the LLC to World Class Holdings. WC Met Center is one of the entities now under the control of a chapter 11 trustee.
