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Brazos Electric Power Cooperative Inc. has asked the judge overseeing its bankruptcy to determine that Texas’s electric operator applied the wrong pricing mechanism for electricity used during the state's historic winter storm that left millions without power, Reuters reported. In court papers filed on Wednesday, Brazos asked Chief U.S. Bankruptcy Judge David Jones in Houston to issue a partial summary judgment ruling on the matter, which it first raised in a lawsuit filed in August as part of its bankruptcy against the Electric Reliability Council of Texas Inc. (ERCOT) over a $2 billion bill it received after the February storm. Brazos says that deciding the pricing dispute quickly will narrow the scope of any further trial over the bill and help it develop a reorganization plan. Brazos, the largest and oldest electric co-op in Texas, filed for chapter 11 protection in March after it was hit with the massive bill. The bill for the seven days the storm lasted is nearly three times the co-op’s total power cost from 2020, which was $774 million, according to court papers. For several days during the storm, ERCOT set electricity prices at $9,000 per megawatt hour.

A handful of states and the federal government’s bankruptcy watchdog are seeking to take their appeal of a bankruptcy court’s approval of Purdue Pharma LP’s reorganization plan and settlement of widespread opioid litigation straight to the U.S. Court of Appeals for the Second Circuit, Reuters reported. During a virtual status conference yesterday before U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., lawyers for the states of Washington, Maryland, Oregon, California, Connecticut and the District of Columbia said they want to expedite their challenge by skipping over a federal district court that would typically hear a bankruptcy appeal. Purdue attorney Marshall Huebner of Davis Polk & Wardwell said during the status conference that he believes they may get a ruling on the merits on Drain's decision faster if they go to the federal district court first, but agreed that the appeals process should move quickly. Purdue filed for bankruptcy in September 2019 to resolve thousands of lawsuits accusing it and the Sackler family members who owned the OxyContin maker of fueling the U.S. opioid crisis through deceptive marketing of its products. The company secured approval on Sept. 1 of its plan and settlement, which include controversial legal protections for the Sacklers. The states and the U.S. Trustee, among others, filed their appeals earlier this month. The challenges will likely focus on the Sackler releases of future opioid litigation, which nine states and the U.S. Trustee opposed. The overall settlement, however, had the support of about 40 states, as well as municipalities, Native American tribes and hospitals, among others.

The Boy Scouts of America are preparing to ask sex abuse victims to vote for a $1.6 billion trust fund to settle their claims in a key step toward ending its contentious bankruptcy, Bloomberg News reported. The proposal sets potential payments based on the type of misconduct, ranging from $3,500 for allegations that did not include any physical touching to $600,000 for the most severe acts of sexual abuse. Those estimates are base amounts that assume there is enough money to fully cover all claims. In the coming months, victims will be asked to read a disclosure statement that describes the trust and how it would pay their claims. Depending on how many people apply to the trust and whether more money comes into the fund, victims could collect as little as 21% of the value of their claims to as much as 100%, according to court documents. U.S. Bankruptcy Judge Laurie Selber Silverstein will take the votes into account when she holds a hearing in late January to decide whether to approve the trust fund as part of the Boy Scouts’ bankruptcy exit plan. On Wednesday, Judge Silverstein finished a multi-day court hearing held by video about the disclosure statement and the voting rules.

The judge overseeing satellite operator Intelsat SA’s bankruptcy has rejected a request by a group of equityholders to bring in an independent examiner to investigate claims of potential mismanagement and other ways to bring in more money for creditors that they say the company has ignored, Reuters reported. U.S. Bankruptcy Judge Keith Phillips in Richmond, Va., issued his ruling yesterday during a virtual hearing, about 40 days before he is set to consider Intelsat’s proposed reorganization plan for approval. The judge said that he did not believe there was sufficient time before the confirmation hearing for an examiner to conduct a meaningful investigation. Under the plan, Intelsat, represented by Kirkland & Ellis, would cut its debt from $15 billion to $7 billion and hand control of the company over to unsecured bondholders of subsidiary Intelsat Jackson Holdings SA. The plan is opposed by another group of bondholders. The equity group, which represents about 2% of Intelsat SA’s shareholders, had argued that the plan is improperly designed solely for the benefit of the Intelsat affiliates’ creditors, rather than creditors and shareholders of the parent entity. The group said that an examiner should be brought in to investigate tax benefits and potential mismanagement claims against executives, among other areas of potential value, that could boost recoveries to creditors of Intelsat SA. The company, however, said that it was too late in the game to bring in an examiner. Judge Phillips agreed, saying he didn’t think an examiner would have enough time to get up to speed before the Nov. 8 plan confirmation hearing.

LATAM Airlines Group, the region's largest carrier, said yesterday that it had secured additional financing of up to $750 million, a key step in a bankruptcy protection process the airline initiated in 2020, Reuters reported. LATAM filed for bankruptcy protection in the U.S. in May 2020 as world travel came to a halt amid the coronavirus pandemic. At the time, it was the world's largest airline to take such action due to COVID-19. The fresh funds announced on Wednesday were obtained for Tranche B of the debtor-in-possession (DIP) financing, the airline said in a statement, "at rates and more competitive conditions than those obtained for Sections A and C, which will allow the group to improve its cost of financing under Chapter 11." LATAM's board of directors unanimously approved the offer, which came from a group composed of Oaktree Capital Management, Apollo Management Holdings "and certain funds, accounts and entities advised by them," the statement said. The proposal must now be approved by the U.S. bankruptcy court overseeing the process. The company said earlier this month it had received several offers to fund its exit from chapter 11 bankruptcy, each of which are worth more than $5 billion.

An eight-day online property auction raised close to $1.68 million for the Archdiocese of Santa Fe’s (N.M.) bankruptcy effort, an executive with the auction company said this week, the Santa Fe New Mexican reported. Louis B. Fisher III of SVN Auction Services said that some contracts still must be signed, so the total isn’t yet certain. The archdiocese also will pay closing costs of 1 percent or a bit more. The archdiocese hopes to generate enough money through insurance, property sales such as those in the online auction and donations to settle a bankruptcy case with about 385 people who have claimed sexual abuse perpetrated by Catholic clergy whom Church officials have found to be “credibly accused.” Fisher said that the auction sold about 140 properties, many of them bundled with others. Failing to meet an undisclosed amount of settlement money in the bankruptcy case could require the archdiocese to sell essential properties, such as community centers, schools and churches. The institution has said it wants to limit sales to nonessential properties, such as the small, vacant parcels in the auction, most of which had been donated. 

Sex abuse victims who filed claims in the Boy Scouts of America bankruptcy case are getting conflicting advice on whether to approve the organization’s restructuring plan and accept more than $1.8 billion in settlements, WSJ Pro Bankruptcy reported. The Boy Scouts, which filed for bankruptcy in February 2020 to resolve sex abuse litigation, could exit chapter 11 if its restructuring plan is approved. A coalition of law firms representing a majority of victims filed court papers Monday advising all victims to vote in favor of the plan and the settlements it provides, while lawyers for the official committee of abuse victims advised them to reject the plan, saying that the settlements are too small. The Boy Scouts reached settlements totaling more than $1 billion two weeks ago with Hartford Financial Services Group Inc., one of its biggest insurers, and the Church of Jesus Christ of Latter-day Saints, a charter organization that had been a major supporter of Boy Scouts activities. The coalition of law firms, which represents more than 60,000 of the roughly 82,000 victims, negotiated those settlements. Including settlements the coalition of law firms reached with the Boy Scouts and its local councils earlier, the total amount of contributions from parties facing liability from sex abuse lawsuits is more than $1.8 billion. Any settlement must be voted on by sex-abuse victims and approved by the U.S. Bankruptcy Court in Wilmington, Del., which is overseeing the Boy Scouts’ chapter 11 case. “The plan represents the only assured path to recover and pay billions of dollars to survivors of sexual abuse,” the coalition of law firms said in a letter to victims filed in court on Monday. Depending on the severity of abuse suffered and other factors, if the settlements are approved victims can expect to receive payments ranging from $3,500 to $2.7 million, according to the letter.

The Buffalo (N.Y.) Catholic Diocese has an unlikely ally in federal bankruptcy court against a Buffalo law firm that is representing 36 plaintiffs with child sex abuse lawsuits pending in state court, the Buffalo News reported. The unsecured creditors' committee, which consists of seven people with child sex abuse claims and has been at odds with the diocese in past issues, is supporting the diocese's efforts to stop the Lipsitz Green Scime Cambria law firm from pushing forward with state court litigation while its chapter 11 bankruptcy case continues. Since 2019, more than 450 Child Victims Act lawsuits have been filed in state courts against the diocese, parishes and other Catholic entities in Western New York. The cases against the diocese were automatically stayed under bankruptcy law provisions. Separately incorporated parishes and other Catholic entities, such as schools and religious orders, do not receive the automatic stay protection afforded to the diocese. Nonetheless, diocese lawyers have been asking the court to extend those protections to more than 400 area Catholic parishes, schools and other entities. They maintain that allowing cases against parishes and schools to go forward will inevitably entangle the diocese in costly litigation, draining assets that otherwise would be used in settling with abuse victims. Early in the bankruptcy, lawyers for the unsecured creditors’ committee joined some CVA plaintiffs’ attorneys in objecting to a proposed bankruptcy court order that would bar cases against parishes from proceeding in state courts. Ultimately, the committee brokered a deal with the diocese. The diocese agreed to turn over tens of thousands of pages of internal documents, including financial reports and clergy abuse files, in exchange for stay protections for parishes and other Catholic entities. Plaintiffs’ attorneys quietly have gone along with the deal, except for the Lipsitz Green Scime Cambria firm, which continues to mount an aggressive effort to have its plaintiffs’ cases heard in state courts.

ERCOT, operator of the Texas electric grid, says that it was just following orders when it charged Brazos Electric Power Cooperative Inc. roughly $2 billion for power and related services provided during the deadly storm in February — a staggering bill that drove Brazos, the state’s largest and oldest electric cooperative, into bankruptcy, the Houston Chronicle reported. In a motion filed recently, ERCOT said it had no choice but to jack up the wholesale price of electricity to as much as $9,000 per megawatt-hour — or 300 times the average rate — during the storm. The motion seeks dismissal of a complaint by Brazos challenging ERCOT’s claim for just under $1.9 billion in Brazos’s chapter 11 bankruptcy case. Brazos filed its complaint Aug. 18. “ERCOT set those prices upon orders of the Public Utility Commission of Texas,” the motion to dismiss said. “ERCOT was statutorily obligated to obey.” Brazos sought chapter 11 protection on March 1, two weeks after Winter Storm Uri roared into Texas, unleashing snow, sleet, ice and subfreezing temperatures across the state. The brutal weather led to a massive failure of power-generating facilities, which left more than 4.5 million homes and businesses without electricity, many for several days. At one point during the storm, ERCOT officials acknowledged, the overtaxed Texas grid came within five minutes of a total collapse. With power scarce and demand colossal, wholesale prices were set at the state maximum of $9,000 per megawatt hour to squeeze out whatever electricity might be available. ERCOT’s $1.9 billion claim is by far the largest pending against Brazos; its approval claim could complicate the Waco-based cooperative’s efforts to emerge from bankruptcy as a robust, reorganized business entity.