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The buyer of Mercy Hospital and Medical Center agreed to operate a full-service community hospital through at least 2029 and to restore services cut after the Chicago facility filed for bankruptcy in February, Bloomberg News reported. The agreement addresses community leaders’ concerns that Insight, a Michigan-based biomedical company, would close the hospital, or pare down its operations, instead of keeping it as a comprehensive facility that treats some of Chicago’s poorest and sickest patients. Insight said it’s committed to stabilizing Mercy’s finances and restoring the hospital as a teaching facility, along with periodic reporting on its progress, according to an emailed statement. It also agreed to community representation on its board, another demand from community, labor and political leaders. Mercy filed for bankruptcy in February after the state denied a plan to shutter it. Owner Trinity Health Corp. agreed to sell the facility for $1 to Insight. Insight will assume full control on June 1. Local leaders had proposed other solutions, including a sale to a partnership of Black physicians and a local hospital.

Details of a recent deal struck between the LeClairRyan bankruptcy estate and the collapsed law firm’s now-disbarred longtime general counsel will remain a mystery for the foreseeable future, despite objections from one of the biggest creditors in the case, RichmondBizSense.com reported. A judge ruled last week to seal all documents and hearings related to the trustee’s settlement with Bruce Matson. That decision came much to the chagrin of UnitedLex, a legal services firm that is owed $8 million from LCR and is in the midst of litigation with LCR trustee Lynn Tavenner. United Lex argued that to seal the details of the Matson matter harms its position as both a creditor and defendant in the LCR case. UnitedLex, which formed a controversial joint venture with LCR shortly prior to the law firm’s dissolution in 2019, is facing a lawsuit filed by Tavenner accusing it of keeping LCR alive longer than it should have in order to “improperly and unfairly extract millions of dollars from the estate, to the detriment of LeClairRyan’s creditors.” Tavenner is seeking up to $128 million in damages.

Argentine power-plant owner Stoneway Capital Ltd. is discussing borrowing money from the senior bondholders challenging the company’s U.S. bankruptcy filing and pushing to relocate the restructuring to Canada, WSJ Pro Bankruptcy reported. Stoneway, seeking to finance its stay in bankruptcy, is discussing potential loan terms with senior bondholders and junior creditors, as well as potential outside lenders, the company’s lead lawyer, Fred Sosnick, said at a virtual hearing on Friday in the U.S. Bankruptcy Court in New York. The bondholders, including BlackRock Inc. and DoubleLine Capital LP, are also seeking to shift Stoneway’s restructuring case back to the Ontario Superior Court of Justice, where the company first filed court proceedings to adjust its debt last year. The judge presiding over the chapter 11 case didn’t issue a ruling Friday on the proper venue for restructuring Stoneway, a holding company with four power plants in Argentina. It filed for bankruptcy in April, facing too much debt and an Argentine Supreme Court ruling that prolonged the closure of a key generation facility.

West Virginia Gov. Jim Justice (R) is personally on the hook for nearly $700 million in loans his coal companies took out from now-defunct Greensill Capital, according to people familiar with the loans and documents described to the Wall Street Journal reported. Justice’s personal guarantee of the loans, which hasn’t been reported, puts financial pressure on the popular Republican governor. He is also dealing with unrelated lawsuits alleging parts of his sprawling network of coal companies breached payment contracts or failed to deliver coal. Greensill packaged the loans and sold them to investment funds managed by Credit Suisse Group AG. Credit Suisse and Greensill ran $10 billion in supply-chain finance funds that extended financing to a range of borrowers. The Swiss bank froze the investment funds in March and is in talks with Justice’s Bluestone Resources Inc. and other borrowers to recoup money to make investors whole, according to the people familiar with the discussions. Credit Suisse is under pressure to recover money quickly and has named Bluestone as one of three large borrowers from the Greensill funds that it has identified in its recovery efforts. Bluestone hadn’t expected to begin repaying the Greensill loans until 2023 at the earliest, it said in a lawsuit brought in March in a New York federal court alleging Greensill committed fraud in its lending practices. Greensill was a once-hot private finance firm whose bankers said could have been worth $40 billion in a potential initial public offering. It attracted investment from SoftBank Group Corp. before collapsing into bankruptcy in March when it lost a key type of insurance that backed up its loans. Greensill specialized in supply-chain finance, a type of cash advance that helps companies manage cash flow.

A Manhattan real-estate lawyer under criminal investigation by New York City and federal authorities allegedly can’t account for $17 million in client funds, according to liquidators called in to sift through his failed law firm, WSJ Pro Bankruptcy reported. The collapse of real estate firm Kossoff PLLC has destroyed livelihoods, tarnished reputations and left a trail of unpaid creditors behind, said liquidation attorney Neil Berger during a court hearing yesterday. Lawyers are only beginning to sort through the trove of documents associated with the defunct firm, which was pushed into liquidation last month after a wave of civil allegations that its namesake lawyer had absconded with client money. Berger said in a virtual hearing in the U.S. Bankruptcy Court in New York that liquidators are focused on collecting books and records for their investigation of the allegations and the firm’s collapse. The whereabouts of the firm’s top lawyer, Mitchell Kossoff, have been unknown since last month, according to the liquidators, who sought a court order yesterday forbidding anyone from taking or destroying documents from the firm’s offices at 217 Broadway or anywhere else. The Manhattan district attorney’s office and the U.S. attorney’s office in Brooklyn also are investigating Mr. Kossoff, whose lawyer said in the hearing that many of the documents at issue had been seized by prosecutors. Before the firm’s bankruptcy, Mr. Kossoff was accused in lawsuits of disappearing with client funds that were supposed to be sitting in escrow for real estate deals. He hasn’t been charged with a crime. 

Bankruptcy Judge Robert D. Drain in New York indicated yesterday that he would permit Purdue Pharma’s proposal to remake itself as a nonprofit company to be put to a vote by thousands of plaintiffs, who have sued to compel the maker of OxyContin to help pay for the terrible costs of the opioid epidemic, the New York Times reported. The restructuring plan is at the centerpiece of an intensely negotiated blueprint for a collective settlement with more than 600,000 claimants who contend that for two decades the company falsely and aggressively marketed its prescription opioid OxyContin as a nonaddictive painkiller, and as a result contributed to hundreds of thousands of opioid-related overdoses and deaths. Besides protecting the company from further legal action over opioids, the plan includes a blanket release from civil lawsuits for Purdue’s owners, members of the billionaire Sackler family. The issue of the Sacklers’ liability has been perhaps the most contentious in the proceedings, ever since Purdue filed for bankruptcy protection in 2019, seeking a shield against rapidly accruing lawsuits. The individual Sacklers, members of one of the wealthiest families in the U.S., did not seek bankruptcy protection, but they argue that they should be covered by the same release from all present and future lawsuits that their company would be given if the plan is confirmed. In return, the Sacklers have agreed to relinquish ownership of Purdue and contribute $4.5 billion to the settlement, including $225 million to the federal government. The money would be paid in installments over nine or 10 years, most of it going to a national opioid abatement trust fund, which would then be disbursed to states and municipalities to support addiction prevention and treatment programs. Judge Drain said that the plan provisionally cleared the legal hurdles of sufficiency, and that he was waiting for a handful of issues to be resolved before the plan is distributed. Purdue is expected to mail out information packets next week that describe the reorganization plan to the roughly 614,000 claimants in the bankruptcy case, with voting to conclude by July 14.

The judge overseeing the bankruptcy of hotel owner Eagle Hospitality Real Estate Investment Trust is considering referring two of its shareholders to prosecutors for possible criminal conduct over accusations they absconded with government COVID-19 relief, WSJ Pro Bankruptcy reported. At a hearing on Wednesday, Judge Christopher Sontchi in the U.S. Bankruptcy Court in Wilmington, Del., called the behavior of Taylor Woods and Howard Wu “beyond the pale,” “reprehensible” and an “abuse” of the U.S. government’s “attempt to help businesses survive the pandemic.” On Friday, Eagle Hospitality alleged that the businessmen, part-owners of the Singapore-based company, received $2.4 million in Paycheck Protection Program funds without authorization on behalf of hotel operations at the Queen Mary ocean liner in Long Beach, Calif. The two used the money for their own benefit, according to the company’s court filing. Eagle Hospitality, which has 15 U.S. hotels, said it has asked Woods and Wu to return the loan proceeds to no avail, and believes the funds have been depleted in ways not intended by the PPP, the popular source of forgivable, government-backed loans set up early in the pandemic, mainly to aid small business. PPP loans can be forgiven if they are mostly used to avoid layoffs. Eagle Hospitality has said it worries that it could be on the hook for repaying a loan it never received. Judge Sontchi said yesterday that he believed that fraud had been committed against Eagle Hospitality and that he would consider referring the matter to federal prosecutors for further investigation.