%1

A Los Angeles mega-mansion that was the biggest U.S. home to ever go up for auction sold for $141 million, including commissions, when bidding closed yesterday, Bloomberg News reported. The 21-bedroom, 49-bath hilltop estate — dubbed “The One” — had a list price of $295 million. Developer Nile Niami said in 2015 that he would ask $500 million for the Bel Air property, which also has five swimming pools and a 30-car garage. The highest offer was $126 million, according to a spokesperson for Concierge Auctions, which ran the sale. A 12% commission for the auction house boosted the total price to $141 million — more than double the previous record for a U.S. home auction, the company said in a statement. Other auctions of luxury properties have fallen short of asking prices. The Villa Firenze in Beverly Hills, California, fetched $51 million last year after Concierge Auctions conducted a sale with a $160 million asking price. The sale requires approval by a bankruptcy court judge, with a closing scheduled by March 21, according to a court filing.

A mediator in Purdue Pharma's bankruptcy case on Wednesday indicated an agreement was being drafted between the company's owners and U.S. states pressing for more money to resolve allegations that the OxyContin maker fueled the opioid epidemic, Reuters reported. Members of the wealthy Sackler family, who own Purdue Pharma, have been trying to reach an agreement with eight states and the District of Columbia, after they had blocked a previous settlement that included a $4.3 billion cash payment. The Sacklers had proposed a settlement worth up to $6 billion in mediation, and most of the states had agreed to settle on those terms, according to a report filed in February by mediator Judge Shelley Chapman. Judge Chapman reported yesterday that she was unilaterally extending talks, which U.S. Bankruptcy Judge Robert Drain had allowed if she is actively involved in drafting terms. While neither Purdue nor the mediator offered any details during a Wednesday court hearing, Drain said he believed the mediation was proceeding as hoped after "reading between the lines" of the latest report. To allow the mediation to progress, Judge Drain extended a litigation shield that protects the Sacklers from being sued for their alleged role in the opioid crisis until March 23. The shield would have expired on March 3 if it was not extended.

Lear Capital Inc., a gold and silver coin dealer previously accused of deceiving customers, filed for bankruptcy in Delaware on Wednesday to streamline any future legal spats, Bloomberg News reported. The company in recent years was sued by both the City of Los Angeles and the State of New York for allegedly pressuring elderly customers and misleading them about fees tied to purchases of its coins. Lear was ordered to pay $2.75 million to LA and $6 million to New York as a result. Although those suits are finished, Lear “believes there are, or may be, other outstanding claims of its customers or other agencies that may be formalized in the future,” the company said in its chapter 11 petition. Lear doesn’t expect to be held liable for any future legal claims, but the bankruptcy filing will allow it to simplify the process for future disputes, the company said. “After careful consideration, we determined that through this process the Company could achieve comprehensive resolution of potential government claims while still operating an otherwise financially strong business,” said John Ohanesian, chief executive officer of Lear Capital.

A San Jose hotel owner is seeking bankruptcy court approval to file a malpractice lawsuit against Pillsbury Winthrop Shaw Pittman LLP, saying it didn’t realize it was granting legal immunity for its attorneys when it left chapter 11, WSJ Pro Bankruptcy reported. SC SJ Holdings LLC, owner of the former Fairmont San Jose hotel, on Monday asked the U.S. Bankruptcy Court in Wilmington, Del., for permission to walk back certain provisions of its chapter 11 plan, which was approved last August and took effect in November. The reorganization plan that Pillsbury drafted contains more than five pages about immunity in “legal jargon” that protects the law firm from a range of claims but was impossible to understand, SC SJ said in its filing on Monday. “Pillsbury never informed or explained” to SC SJ that the provisions about legal immunity could absolve the law firm of potential malpractice liability from representing the hotel owner, the filing said. The owner believes it is entitled to seek damages through a malpractice lawsuit. SC SJ said the bankruptcy court should give it limited relief from the part of the approved plan that spells out immunity provisions preventing it from suing Pillsbury for malpractice. “Doing otherwise rewards Pillsbury for obtaining the releases without” the consent of SC SJ “and without the benefit of independent counsel,” the filing said. The Fairmont San Jose hotel, a frequent venue for technology conferences, filed for bankruptcy last March and was closed after a downturn in business events during the pandemic. The hotel is remarketing itself by switching to Hilton Hotels & Resorts ’ Signia brand and is taking reservations for late next month.

A unit of Eros STX Global Corp. that owns the distribution rights to a forthcoming Gerard Butler disaster movie sequel filed for bankruptcy in Louisiana, court papers show, Bloomberg News reported. FSO Jones LLC, a subsidiary of Eros STX, sought chapter 11 protection from creditors on Monday in New Orleans. The company listed assets of no more than $50 million and liabilities of as much as $500 million in its bankruptcy petition. FSO owns the rights to the sequel of a prior STX film, “Greenland,” according to a company statement. The bankruptcy filing is a bid to protect the project while the film production company works to close its sale of STX to Najafi Companies and address a contract dispute. “Although pre-production of this sequel is going well, we determined that it was necessary for FSO Jones to seek bankruptcy relief to protect the value of that entity for all of our stakeholders while we continue to work toward closing our strategic alternatives for this company,” representatives for Eros STX said in an emailed statement.

The insolvency case of Guo Wengui, the exiled Chinese businessman, got off to raucous start Tuesday when a longstanding creditor called the move “astonishing” and signaled it would wage an aggressive fight in bankruptcy court, Bloomberg News reported. Guo, a former partner of Trump political strategist Steve Bannon, filed for bankruptcy last month after moving a yacht from New York waters, a shift that would keep it out of the reach of creditors, and then facing a $134 million penalty for taking that step. Guo’s biggest creditor is Pacific Alliance Asia Opportunity Fund, which made a loan of $30 million to the businessman in 2008. That loan has since ballooned to more than $116 million with accrued interest. In papers accompanying his bankruptcy filing, Guo said he had almost no assets and little income. But the businessman has often been seen aboard the yacht at issue, a vessel purchased for about $30 million known as Lady May. A New York judge found last month that Guo owns or controls the yacht, an asset that was not disclosed in his bankruptcy filing. “The lack of candor to this court already is what impels us to believe that no quarter should be given,” Peter Friedman, an attorney for Pacific Alliance Asia Opportunity Fund, said at Guo’s first bankruptcy hearing in Connecticut. Friedman said Guo has “a maze of entities, and family members, and trusted confidants to shift around assets” for him and said he can’t be trusted.

U.S. lawmakers are planning legislation to outlaw the controversial bankruptcy maneuver called the “Texas two-step” to prevent large companies from abusing the chapter 11 process, the chair of the Senate judiciary committee has said, the Financial Times reported. Dick Durbin, who is also Democratic whip in the Senate, said negotiations were under way within the committee on a draft bill that would remove what he described as a “get out of jail free card” being deployed by some of the wealthiest companies. His comments follow the failure on Friday by lawyers representing almost 40,000 cancer sufferers to prevent Johnson & Johnson from deploying the bankruptcy scheme to help it settle billions of dollars of claims that its baby talc was tainted with asbestos and caused their illnesses. “When you have massively profitable companies using this bankruptcy maneuver to avoid accountability to dying cancer victims, it’s clear that corrective action is needed,” Durbin told the Financial Times. “It is our goal to pursue bipartisan legislation in committee that curbs corporate bankruptcy abuses like the Texas two-step.” A U.S. bankruptcy judge on threw out a motion by talc claimants to dismiss the bankruptcy of J&J subsidiary LTL management in a ruling that critics warn could open the floodgates for other companies to use the bankruptcy courts to manage personal injury and other tort claims.

A South Jersey specialty generic pharmaceutical firm has filed a motion to convert its chapter 11 bankruptcy filing to chapter 7, a move the company said would allow it to more rapidly wind down the business, the Philadelphia Business Journal reported. Teligent Inc., in documents filed at U.S. Bankruptcy Court in Delaware, said since filing for bankruptcy in October the company has engineered three separate sales transactions that generated about $88 million in cash proceeds. Despite its "best efforts to negotiate a consensual exit" from bankruptcy, Teligent stated in its motion, discussions between the company, its committee of unsecured creditors and the company's pre-petition secured lenders have "reached an impasse and mounting expenses continue to erode value for the [the company's] stakeholders." As a result, Teligent said that it has no choice other than to request the conversion. Teligent, of Buena in Atlantic County, N.J., filed for bankruptcy protection with assets of $89 million and debts of $135.8 million.