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A U.S. judge is expected to rule today on OxyContin maker Purdue Pharma’s request to approve its bankruptcy reorganization plan that would shield the company’s Sackler family owners from future litigation over the opioid crisis, Reuters reported. If U.S. Bankruptcy Judge Robert Drain approves the deal, which Purdue values at more than $10 billion, it would clear a path to resolve thousands of opioid lawsuits. The plan would dissolve the drugmaker and shift assets to a new company owned by a trust rather than the Sackler family members. The new company would be run to combat the opioid epidemic in U.S. communities that alleged Purdue and its owners aggressively marketed the painkiller OxyContin while playing down its abuse and overdose risks. The plan includes legal releases shielding Sackler family members from future opioid litigation, a controversial provision that some states opposed. The Sacklers have denied allegations, raised in lawsuits and elsewhere, that they bear responsibility for the U.S. opioid epidemic. They have said they acted ethically and lawfully while serving on Purdue’s board. The Purdue bankruptcy plan includes a $4.5 billion contribution from Sackler family members. The contribution is in the form of cash that would be paid over roughly a decade and also includes $175 million in value from relinquishing control of charitable institutions. Read more. 

In related news, Purdue Pharma launched a behind-the-scenes effort in recent days aimed at discouraging the Justice Department from appealing a pending multibillion-dollar bankruptcy settlement for the OxyContin-maker, NPR reported. NPR acquired an early draft of a letter distributed by the drug company to groups supportive of the bankruptcy deal. The letter is framed as a direct appeal to DOJ officials and purports to be written by those injured by the company and members of the Sackler family. "We collectively speak for the overwhelming majority of the state and local governments, organizations, and individuals harmed by Purdue and the Sacklers," the letter states. There is no mention in the document of the company's role launching the effort or crafting the message. The letter warns that any Justice Department appeal would "jeopardize the delivery of billions of dollars" to communities struggling with high rates of addiction, overdose and death. The document's language suggests that Purdue Pharma hoped it would eventually be signed by state attorneys general, local government officials, hospitals and a group representing individual victims of the company's opioid products. The Justice Department hasn't said conclusively whether it will challenge the settlement in court and declined NPR's request for comment. During a two-week bankruptcy trial that concluded Friday, attorneys for two different branches of the DOJ indicated an appeal is possible. They argued the liability releases demanded by the Sacklers are unlawful and would violate the constitutional rights of those with potential claims against the family. Read more.

A USA Gymnastics reorganization plan includes up to $425 million for survivors who say they were sexually abused by former team doctor and convicted sex offender Larry Nassar, NBCNews.com reported. The dollar amount is contained in court documents filed yesterday with an Indiana bankruptcy court, and the organization said that it was reached with a survivors’ committee. Hundreds of women say they were sexually assaulted by Nassar, the former doctor for USA Gymnastics who pleaded guilty to sexually abusing 10 minors in a Michigan court in 2017 and is serving up to 175 years in prison. He is expected to be behind bars for the rest of his life. "After extensive discussions, this plan has been jointly proposed by USA Gymnastics and the Committee, and it is supported by many of the involved insurers," USA Gymnastics said yesterday. "We anticipate that this plan will be confirmed later this year and greatly appreciate all parties’ efforts to get to this point." Survivors still have to vote on the plan. The $425 million figure is if insurers agree; other alternatives are for partial settlement or a return to litigation, according to the documents. USA Gymnastics filed for bankruptcy protection in 2018 in the wake of the scandal and lawsuits.

Sequential Brands Group Inc., the New York-based company that owns and licenses consumer brands from Jessica Simpson fashions to Gaiam yoga wear and Joe’s Jeans, has filed for bankruptcy and will sell assets, saying that a big debt load and the COVID-19 pandemic made business difficult, WSJ Pro Bankruptcy reported. The publicly traded New York business sought chapter 11 protection Tuesday in the U.S. Bankruptcy Court in Wilmington, Del., with a $333 million offer for its active-division brands from brand manager Galaxy Universal LLC and a $38.2 million stalking-horse bid for the Joe’s Jeans brand from Centric Brands LLC, another apparel licensing company. Sequential lenders including KKR & Co. and Apollo Global Management Inc. may bid their debt claims for the remaining brands, court documents show. The company said yesterday that it enters bankruptcy with a restructuring agreement with its lenders and has lined up $150 million in financing, of which $141 million will be available immediately pending court approval, to stay afloat through the chapter 11 process. Sequential’s two biggest shareholders are Martha Stewart and private-equity firm Tengram Capital Partners, which own 10.9% and 11.5%, respectively. Sequential has been in trouble with the U.S. Securities and Exchange Commission since last year, when the regulator sued the company, alleging shortcomings in its accounting. In February, Sequential filed a motion to dismiss the complaint, which remains pending. In early August, the SEC settled charges against Sequential’s former CFO, Gary Klein. Revenues started declining in 2019 and continued declining during the pandemic, according to a court filing by current CFO Lorraine DiSanto. The impact of COVID-19 also caused supply-chain disruptions for retail licensees, she said in a court filing.

The Boy Scouts of America are nearing a revised deal with Hartford Financial Services Group Inc. for the insurer to compensate survivors of childhood sexual abuse and ease the youth group’s exit from bankruptcy, WSJ Pro Bankruptcy reported. Hartford’s contribution could approach $800 million under the possible deal, though negotiations continue and there is no guarantee of a final agreement. A settlement would clear Hartford of any further obligation under policies it wrote for the Boy Scouts decades ago, while providing compensation for abuse survivors. To take effect, any settlement with Hartford would require bankruptcy-court approval and support from a majority of survivors who have filed claims in the Boy Scouts bankruptcy case. Liability insurers have had “productive” talks with the Boy Scouts over a broader proposed restructuring of the youth group’s liabilities for past sexual abuse, its lawyer Jessica Lauria said in a court hearing yesterday. Abuse survivors in April rejected a previous deal between Hartford and the Boy Scouts valued at up to $650 million. Negotiations continued to find an insurance framework acceptable to survivors. Talks concerning a new agreement have included a coalition of law firms representing most of the roughly 82,500 men who stepped forward after the Boy Scouts filed for bankruptcy.

Oilfield services provider Basic Energy Services is warning employees that nearly 500 jobs could be eliminated in Texas, according to a filing with the state's workforce commission, as the company works through chapter 11 restructuring that includes asset sales, Reuters reported. The job cuts are focused throughout Texas, with 135 positions eliminated in Howard County in West Texas and 120 in Tarrant County, where its headquarters are located, according to the filing. The Fort Worth, Texas-based company this month filed for bankruptcy and said it had entered into asset purchase agreements with rivals Axis Energy Services Holding Inc., Berry Corp. and Select Energy Services Inc. If those asset sales are not completed, or if the acquiring company does not offer current Basic employees jobs following the close of the sales, the positions will be eliminated, Basic said in the filing. In a statement earlier this month, CEO Keith Schilling noted that the company faced "extraordinary challenges as a result of the COVID-19 pandemic." He added, in the earlier statement: “We believe the asset purchase agreements will enable us to maximize the value of our businesses and create the best path forward for our customers, partners, employees and the communities we serve.”

The chief contractor at a failed multibillion-dollar project to build two nuclear reactors in South Carolina has agreed to pay more than $20 million as part of a cooperation agreement with federal authorities probing the fiasco, the Associated Press reported. Under an agreement announced yesterday by Acting U.S. Attorney Rhett DeHart, Westinghouse Electric Co. will contribute $5 million to a program intended to assist low-income ratepayers affected by the project’s failure. Another payment of $16.25 million will be due before July 1, 2022. The company will also be required to cooperate with federal investigators still probing the company’s role in the 2017 debacle, which cost ratepayers and investors billions and left nearly 6,000 people jobless. Westinghouse was the lead contractor on the construction of two new reactors at the V.C. Summer plant. South Carolina Electric & Gas Co. parent company SCANA Corp. and state-owned utility company Santee Cooper spent nearly $10 billion on the project before halting construction in 2017 following Westinghouse’s bankruptcy. The collapse of the V.C. Summer project spawned multiple lawsuits, some by ratepayers who said company executives knew the project was doomed and misled consumers and regulators as they petitioned for a series of rate hikes. Three top-level executives have already pleaded guilty in the multi-year federal fraud investigation. A fourth has been charged and is expected in federal court Tuesday.

The Bishop’s Lodge hotel in Santa Fe, N.M., part of the Auberge Resorts Collection, filed for bankruptcy Monday blaming mismanagement and construction delays amid a feud between the luxury resort’s owners, WSJ Pro Bankruptcy reported. The resort, which has been adding guest rooms and new amenities like horseback trail-riding and trout fishing, filed a chapter 11 petition in the U.S. Bankruptcy Court in Wilmington, Del., seeking to restructure close to $80 million in debt. Owned by private investors and run by high-end resort manager Auberge Resorts LLC, Bishop’s Lodge enters bankruptcy with the support of most of its owners and an agreement to transfer a 100% stake to a senior lender in exchange for roughly $34 million in debt forgiveness. Construction on the resort was originally scheduled for completion in mid-2018, though after a series of delays it was only able to initiate a “soft reopening” on July 1. HRV Santa Fe LLC, a private company and stakeholder in the resort, previously served as manager. HRV hired different general contractors to renovate the property but dismissed them, causing delays and cost overruns, according to a declaration filed to the court by Michael Norvet, president of the holding company that owns the resort.

The judge overseeing Purdue Pharma’s bankruptcy on Friday urged opponents of the OxyContin maker’s reorganization plan, which would resolve widespread opioid litigation, to settle quickly with the company’s Sackler family owners because it would save time and money on appeals later, Reuters reported. U.S. Bankruptcy Judge Robert Drain made his remark during a hearing on Friday morning, five days before he is set to rule on the plan. The deal, if approved, would clear a path to resolve thousands of opioid lawsuits and shield the Sackler family owners from future litigation. Opponents of the deal have said the releases are too broad. “I think, having heard the lawyers from both sides — they are very talented lawyers, they know the risks they face —I would hope their clients would also be realistic about those risks,” Judge Drain said. Purdue has said the deal, which directs funding toward opioid abatement programs, is worth more than $10 billion. The Sacklers have agreed to contribute approximately $4.5 billion.

The Boy Scouts of America is pushing to exit bankruptcy after seeking chapter 11 protection last year from a growing number of sex-abuse claims, WSJ Pro Bankruptcy reported. The bankruptcy case, which spotlighted past failures by the organization to protect children, may be nearing its end as a settlement offer gains momentum. The youth group has said it needs to make peace with sex-abuse victims for its mission to survive. Sex-abuse claims dogged the Boy Scouts for years, especially after a court-ordered release in 2012 of internal files on reports of abuse by volunteers. The youth group turned to bankruptcy when states including New York, New Jersey and California suspended statutes of limitations on abuse claims, opening the door to lawsuits alleging childhood trauma regardless of when it happened. The Boy Scouts filed for chapter 11 protection in February 2020 amid intensifying legal pressure over alleged abuse and with billions of dollars of land, buildings, cash and investments to protect. The chapter 11 filing covered the national Boy Scouts organization headquartered in Irving, Texas, but excluded roughly 250 affiliated local councils across the U.S. that hold the bulk of the 111-year-old institution’s wealth, much of it in property holdings. Part of the chapter 11 strategy was to blunt the financial consequences of sex-abuse litigation for the local councils, which are chartered by the Boy Scouts to administer scouting programs. When the bankruptcy began, the Boy Scouts reported roughly 275 pending lawsuits alleging sexual misconduct by employees or volunteers, and roughly 1,400 other known abuse claims. The number of claims ballooned to 82,500 after the youth group urged abuse victims to step forward and file claims by a bankruptcy-court deadline last year. Reaching a financial settlement will help preserve the mission of the Boy Scouts, according to the youth group, which has also apologized to victims.

Boeing Co. has settled its differences with GDC Technics LLC, a bankrupt supplier of products and services for Air Force One that filed for chapter 11 over contract disputes involving the presidential plane, WSJ Pro Bankruptcy reported. Boeing and its Air Force One subcontractor GDC will “resume customary business interactions” when the Fort Worth, Texas-based company restructures its finances and leaves chapter 11, according to settlement papers filed Thursday in the U.S. Bankruptcy Court in San Antonio. The proposed settlement clears the way for GDC to leave chapter 11, where the aircraft modification and technology business sought protection in April, alleging that Boeing had caused delays on contracts to supply Air Force One and failed to pay for work. Each company blamed the other for contract delays. Boeing said it was a major creditor of GDC, filing a $314 million claim in the chapter 11 case, dwarfing all other claims against the company. Under the agreement filed Thursday, Boeing will restart discussions with GDC about supplying products for its aircraft. The aerospace giant will also consider providing technical support again to customers that do business with GDC “so long as GDC is operating in compliance with its licenses and other agreements with Boeing,” the court filing said.