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Johnson & Johnson should know by the end of next month whether its controversial use of bankruptcy to try to resolve billions of dollars in cancer claims can proceed, or if the consumer products giant must fight roughly 38,000 lawsuits individually, Bloomberg News reported. Bankruptcy Judge Michael B. Kaplan said in court on Friday that he will rule by Feb. 28 on a demand to throw out the bankruptcy case filed by a J&J unit responsible for paying claims related to allegations that its baby powder causes certain cancers. J&J created a unit called LTL Management and put it in bankruptcy to resolve all current and future baby powder lawsuits. All of the lawsuits are temporarily on hold while the bankruptcy case continues. Kaplan will hold a multiday trial starting on Feb. 14 to decide whether the bankruptcy should be thrown out. Should Judge Kaplan allow the bankruptcy to continue, LTL would be able to set up a trust funded by J&J that would pay current and future baby powder claims. The company has proposed put at least $2 billion into such a trust. Lawyers for baby powder claimants say they want to proceed with the lawsuits instead of negotiating about the size of a trust fund in bankruptcy.

A Texas bankruptcy judge has denied a request by St. Croix Energy to stay the bankruptcy sale of St. Croix’s refinery from Limetree Bay to the Jamaican company West Indies Petroleum Ltd., the Virgin Islands Daily News reported. St. Croix Energy attorney Gregg Galardi filed an emergency motion to stay the sale order by Judge David Jones on Jan. 5. The request came after Judge Jones voided the outcome of a Nov. 18 auction — which St. Croix Energy won — and reopened the auction to allow for a new bid at Limetree’s request. St. Croix Energy won the first auction with a bid of $20 million cash, plus professional fees of the debtor through a transitional services agreement which would have had the debtors operate the refinery on behalf of SCE. But, at Limetree’s request, Judge David Jones reopened the auction to allow a new bid from West Indies Petroleum, whose chief executive officer had a medical emergency on the eve of the first auction. At the second auction on Dec. 18, West Indies Petroleum and Port Hamilton Refining and Transportation were the joint winning bidder with a $62 million bid. St. Croix Energy is appealing, arguing that there are several issues that require further examination, including whether the court should have reopened the auction, and whether the court “erred in entering the Sale Order approving a transaction that did not comply with the existing bid procedures order,” or the order reopening the auction, according to a statement of issues filed by Galardi on Thursday. Galardi asked the court to stay the sale pending appeal, and attorneys for Limetree Bay and West Indies Petroleum opposed the motion. Judge Jones found that St. Croix Energy has failed to justify the request for a stay, and denied the motion in an order filed Thursday.

An appeals court judge ruled Friday that a bankruptcy court should consider additional evidence in the chapter 11 filing of a Bronx real-estate project that could potentially disqualify the case, WSJ Pro Bankruptcy reported. The project’s developers, who filed the appeal against the lender-backed bankruptcy filing, didn’t get their desired outcome of an immediate dismissal, but the ruling also didn’t kill the possibility for the case to be thrown out. Judge Ronnie Abrams of the U.S. District Court for the Southern District of New York said the developers of the project at 286 Rider Avenue filed new materials “critical to the underlying determination [of] whether the bankruptcy case was properly authorized” after bankruptcy judge Lisa Beckerman allowed the case to move forward. Judge Abrams said that she was sending back the case because Judge Beckerman of the U.S. Bankruptcy Court in New York didn’t have an opportunity to review the materials before her ruling. The bankruptcy case threatens to strip the developers, Toby Moskovits and Michael Lichtenstein, of their equity interest in the property where they had planned to build a 105-unit apartment building. Joyce Kuhns, a lawyer representing Ms. Moskovits and Mr. Lichtenstein, told Judge Abrams on Thursday that the developers needed this case resolved quickly because they were facing a tight deadline. A lucrative tax exemption program known as 421a, which applies to developers in New York City who build multifamily housing on underutilized land, is set to expire in June, and its future is uncertain, Ms. Kuhns said in an oral argument. To qualify for the current exemption, projects must commence construction on or before June 15.

The ill CEO of bankrupt nursing home chain QHC Facilities LLC is recovering, but the judge overseeing the proceedings said she still has “grave concerns” about the case, foremost making sure patients are protected, Bloomberg News reported. “There was chaos before this case was even filed and it’s continued now post-petition,” U.S. Bankruptcy Judge Anita Shodeen said during a Thursday hearing. The U.S. Trustee moved to appoint a chapter 11 trustee this week after Chief Executive Officer Nancy Voyna was hospitalized “with extremely serious health conditions,” according to a Tuesday court filing. QHC filed for bankruptcy Dec. 29 with a plan to seek a buyer, citing “crippling staffing and employee retention issues” and the death of Voyna’s husband and co-founder in June as factors. Jeffrey Goetz, a lawyer for the company, said a courtesy call to the U.S. Trustee about the situation on Sunday led to “assertions that the sky was falling, the ship was rudderless” and the company needed immediate help.

A judge overseeing the bankruptcy of the largest electric co-op in Texas on Wednesday shut down certain arguments that the state's electric grid operator was looking to make in a legal brawl with the co-op over a nearly $2 billion bill stemming from a historic winter storm last year, Reuters reported. Bankruptcy Judge David Jones in Houston issued his ruling ahead of a February trial over the $1.9 billion claim the Electric Reliability Council of Texas filed in Brazos Electric Power Cooperative Inc's chapter 11 case. The judge held that some of the arguments ERCOT tried to raise to defend its claim weren't relevant to the immediate issue. Brazos filed for bankruptcy in March 2021 after being hit with the energy bill from ERCOT. The bill for the seven-day storm is nearly three times the co-op’s total power cost from 2020, which was $774 million, according to Brazos. For several days during the storm, ERCOT set electricity prices at $9,000 per megawatt hour, around 500 times the usual rate. In August, the co-op filed a lawsuit as part of its bankruptcy objecting to ERCOT’s $1.9 billion claim and aiming to substantially reduce the amount, arguing that the charges are "exorbitant and excessive." ERCOT, in response, said Brazos purchased energy it knew it couldn’t afford and failed to comply with agreements under their market participation contract. Additionally, ERCOT said Brazos was partly at fault for not properly preparing its facilities for severe winter weather. But Judge Jones held that those issues “have nothing to do with the proceeding." A trial on the dispute is set to begin on Feb. 21.

Apollo Global Management Inc., Elliott Investment Management LP and other investors in distressed corporate debt were sued by a unit of Deutsche Bank AG for allegedly making false claims about its role in a $725 million loan to SunEdison Inc. before the energy company filed for bankruptcy, Bloomberg News reported. Deutsche Bank Securities, which helped arrange the credit facility in 2016 and was sued two years later for allegedly duping the creditors into the loan, said investors that also include Highbridge Capital Management LLC and Cerberus Capital Management LP are falsely claiming they relied on the German company’s analysis of SunEdison before making the loan. In a complaint filed Monday in New York state court in Manhattan, Deutsche Bank said it “did not independently generate or communicate its own analyses and had no role in advising the lenders or otherwise helping them assess their potential investment.” The bank added that the lenders made a “calculated bet” on a company that was under intense financial pressure in January 2016, and it simply “did not pay off,” according to the complaint. SunEdison filed for bankruptcy on April 21, 2016. The lawsuit is the latest legal spat over the loan. A California judge in July 2020 denied Deutsche Bank’s motion to dismiss a suit filed in 2018 by an entity formed to represent the lenders, SESL Recovery LLC. That case is set for trial in July.

Local creditors of Latam Airlines Group SA are up in arms over a bankruptcy plan that would leave them with next to nothing even as holders of overseas bonds get almost all their money back, Bloomberg News reported. BancoEstado SA, a Santiago-based bank acting on behalf of local noteholders, has asked Latin America’s largest airline to improve its terms. The investors are threatening to sue if their demands aren’t meant, and contend that as a Chilean company, Latam should have filed for protection in local courts — instead of New York — that would have treated domestic creditors better. Local bonds have plunged since the airline’s latest plan to exit bankruptcy was filed in November, with inflation-linked notes due in 2029 trading at 10 cents, according to extrapolated prices calculated by data provider LVA Indices. Overseas bonds, meanwhile, have been among the country’s best performers. Securities due in 2024 have surged to 96 cents on the dollar, from as low as 20 cents in the weeks after the bankruptcy filing in May 2020.

A New Jersey federal judge on Tuesday said a dispute over Johnson & Johnson’s legal protections against talc-related litigation must be decided by a bankruptcy judge, Reuters reported. Chief U.S. District Judge Freda Wolfson, who oversees a large chunk of the talc-related litigation against J&J, denied a request from people who have sued J&J alleging that its talc products cause cancer to decide whether the pharmaceutical giant is entitled to protection against such lawsuits while its subsidiary, LTL Management LLC, goes through bankruptcy. J&J, which maintains that its talc products are safe, shifted its talc liabilities to LTL and then placed the subsidiary into bankruptcy in October. It plans to use the LTL bankruptcy to negotiate a potential deal to resolve about 38,000 talc-related claims. U.S. Bankruptcy Judge Michael Kaplan, who oversees the LTL bankruptcy issued a temporary order shielding J&J from litigation, which expires on Jan. 28. A committee that represents individuals who say J&J’s talc products cause ovarian cancer and mesothelioma asked that Judge Wolfson decide whether J&J is entitled to longer-term protection. The committee argued in court papers that since she oversees the multidistrict litigation where many of the talc cases are consolidated, she would be better suited to say whether J&J should be allowed to put all of those lawsuits on hold in light of her familiarity with the talc claims. J&J disagreed, saying that the underlying tort claims are not relevant to whether the litigation should be paused during the bankruptcy. Judge Wolfson did not say why she declined to decide the matter, but said she would issue a decision with her reasons in the next 20 days. Judge Kaplan will hear arguments on the matter on Jan. 21.

Seadrill New Finance Ltd. received court approval for a chapter 11 plan Wednesday to hand control to creditors after a single day in bankruptcy, bringing its parent company, offshore rig operator Seadrill Ltd., one step closer to completing its own restructuring, WSJ Pro Bankruptcy reported. Seadrill New Finance, a Seadrill Ltd. financing subsidiary, sped through bankruptcy after filing for chapter 11 protection on Tuesday in the U.S. Bankruptcy Court in Houston. The financing unit filed for bankruptcy with a prepackaged restructuring plan in hand, backed by creditors holding more than 99% of its $535 million in secured notes, according to a court filing by Tyson de Souza, an authorized representative of New Finance. In approving New Finance’s one-day bankruptcy, Judge David Jones set aside objections to the fast-track nature of the process raised by the office of the U.S. Trustee, an arm of the Justice Department charged with overseeing the bankruptcy courts. The speed with which the company sought the judge’s approval is unprecedented compared even with other prepackaged chapter 11 cases, leaving interested parties with inadequate time to object or respond to the company’s restructuring plan, Stephen Statham, a lawyer for the U.S. Trustee’s office said at the hearing yesterday. Judge Jones, however, argued that the New Finance case should be viewed in a different light than other one-day bankruptcy cases because it is a company with no operations. The bankruptcy is one piece of a larger group of Seadrill cases, including for New Finance parent Seadrill Ltd. Seadrill Partners LLC, a New Finance subsidiary filed for bankruptcy in December 2020, and exited from court protection last year.

The Wisconsin Department of Workforce Development and the Wisconsin Department of Justice on Wednesday announced a $200,000 agreement in DWD's federal court claim filed in the Briggs & Stratton Corp. bankruptcy case, Fox6Now.com reported. The funds, along with a $5 million surety bond, are available to pay worker's compensation claims of the formerly self-insured employer. Additionally, a Self-Insured Employers Liability Fund (SIELF) is available to make up any shortfall and protect payments to injured employees should these funds and the surety bond be exhausted. The SIELF is funded by assessments on other self-insured employers when needed. All worker's compensation claims are paid directly or indirectly by employers; no taxpayer funds are used to support this safety net for injured employees.