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Almost $400 million of fees and expenses have been racked up by professionals working the bankruptcy of Stamford, Conn.-based Purdue Pharma LP, Bloomberg News reported. The bills add up to more than half the amount that all individuals harmed by OxyContin would share under the drugmaker’s proposed settlement of personal injury claims. Purdue’s financial woes have turned into a cash machine for the lawyers and consultants hired by the company and its creditors who are sorting through claims that the drugmaker fanned the flames of the U.S. opioid crisis. “These are huge — this is a large chunk of money that would otherwise be going to pay victims of a horrible tort,” said Prof. Bob Lawless University of Illinois School of Law. “You have to pay the undertaker. Whether they have to be paid that much is another question.” Purdue is unusual because its biggest creditors aren’t vendors or landlords, but cities and states reeling from the opioid epidemic, as well as the people who lost everything, including their loved ones, to opioid drugs. Purdue Pharma is paying market rates for professionals in the case, the company said in an emailed statement, noting that it’s responsible for the fees of multiple creditor groups.

Boeing Co. accused the owners of bankrupt parts manufacturer Tect Aerospace Group Holdings Inc. of raiding the company’s assets and sought a stake in any legal claims against the corporate insiders allegedly responsible, WSJ Pro Bankruptcy reported. Boeing said that in return for providing roughly $60 million in bankruptcy financing, it deserves a stake in possible commercial tort claims against Tect’s directors and officers for potentially breaching their fiduciary duties to the company, which filed for chapter 11 protection last month. Tect appeared in bankruptcy court yesterday seeking final approval for its chapter 11 financing package. Boeing, a Tect customer, said that it is also the only lender to come to the company’s rescue and provide the financing needed to conduct asset sales. Judge Karen Owens of the U.S. Bankruptcy Court in Wilmington, Del., said that nearly all of the terms Boeing was requesting were reasonable and appropriate, including its request for an interest in potential claims against Tect insiders. The judge also ordered some tweaking to the financing package, saying that it would refinance more prebankruptcy debt held by Boeing than is customary. Wichita, Kan.-based Tect has reached a proposed deal to sell assets at its Everett, Wash., manufacturing plant for $31.1 million. The company also has facilities in Wellington and Park City, Kan.

More than a year into the Boy Scouts of America’s bankruptcy proceedings, frustration is at a boiling point for sex abuse survivors who say the nonprofit organization is doing little to put forth meaningful reparations for their trauma, USA Today reported. Their anger has extended to the bankruptcy court itself, which is redacting hundreds of letters sent to Judge Laurie Selber Silverstein, preventing the public from understanding the full extent of the abuse they say they suffered as children. The Torts Claimants Committee, the official body chosen to represent abuse survivors in the case, filed an objection yesterday to the Scouts’ latest bankruptcy reorganization plan, saying that it "minimizes the organization’s history of failing to protect children from sexual predators." Central to the objection is what the committee calls a small sum that the Boy Scouts has offered to put toward a trust for survivors as well as a lack of "the most basic information necessary" for survivors to ensure they are getting a fair deal. That includes financial details of local Scout councils and sponsoring organizations, some of which attorneys maintain are as liable as the national organization for the abuse. The two camps differ wildly on estimated costs of the abuse. The Boy Scouts said in its latest plan that its claims expert estimates the cost of settling the claims at between $2.4 billion and $7.1 billion. The claimants' committee says it will be more than $100 billion.

Former talc miner Cyprus Mines Corp may depose two candidates proposed by insurers to represent the interests of people who may bring future talc-related claims in the company’s bankruptcy, a judge overseeing the case ruled yesterday, Reuters reported. During a virtual status conference, U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Del., signed off on the request by Cyprus, which is being represented by Reed Smith, to conduct brief depositions of the two insurer-backed candidates for the role of future claims representative (FCR) in its chapter 11 case. Her ruling comes a few weeks ahead of a June 2 hearing in which she'll be asked to choose between three people for the role. Cyprus filed for bankruptcy in February as part of a settlement with another bankrupt talc company, Imerys Talc America Inc., that had acquired some of its talc-related assets in 1992. Cyprus is one of the companies that has been sued in recent years by plaintiffs alleging a link between exposure to talc products and certain types of cancer and asbestos-related diseases. While the company already faces hundreds of lawsuits making talc-related personal injury claims, it is seeking the appointment of an FCR to represent those who may have claims but may not be aware of them right now. FCRs are a regular presence in mass tort-related bankruptcies.

No region of this nation has been spared the steep emotional, physical, and financial toll of the opioid addiction epidemic, a crisis fueled in part by drugmaker Purdue Pharma’s aggressive marketing of highly addictive OxyContin. While the cost of the estimated 450,000 lost lives to the drug epidemic is incalculable, state and local officials estimate the economic toll to be in the trillions of dollars. Massachusetts is among the states that have filed suits against the company, according to a Boston Globe editorial. Purdue Pharma is bankrupt. But the Sacklers, the family behind the company and its practices, are worth $11 billion, according to congressional estimates. And they are seeking to exploit a loophole in bankruptcy law that could shield a large portion of their personal wealth, amassed in part from the drug’s sale, from creditors including states and municipalities, according to the editorial. That can’t be allowed to happen. Bankruptcy judges should heed the formal objections filed by Massachusetts Attorney General Maura Healey and dozens of other state officials seeking to stop the family, which is not party to the company’s bankruptcy proceedings, from shielding the majority of their fortunes from it in exchange for a $4 billion payment and forfeiture of company control, according to the editorial.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Insurers who could be left footing the bill for personal injury litigation against former talc miner Cyprus Mines Corp. are challenging the company's proposed candidate to represent future tort claimants, Reuters reported. Cyprus is asking U.S. Bankruptcy Judge Laurie Selber Silverstein in Delaware to approve Roger Frankel as the future claims representative (FCR) in its chapter 11 case. A status conference on the matter is scheduled for today. The company, represented by Reed Smith, filed for bankruptcy protection in February as part of a settlement with another bankrupt talc company, Imerys Talc America, that had acquired some of its talc-related assets in 1992. Cyprus is one of the companies that has been sued in recent years by plaintiffs alleging a link between exposure to talc products and certain types of cancer and asbestos-related diseases. As of Feb. 16, the company was facing 436 lawsuits making talc-related personal injury claims, according to court papers.

The National Rifle Association, long a feared power broker, will learn its fate next week in a court ruling that could hobble the gun rights group and imperil the three-decade reign of its controversial boss, Wayne LaPierre, Bloomberg News reported. The judge is weighing several options. He could let the NRA’s bankruptcy case go forward, giving the group a measure of refuge from a New York lawsuit that threatens its assets and even its existence. He could put the group under the control of a trustee, empowered to make decisions about its finances and its future. Or, in a highly unusual move, he could throw the NRA out of bankruptcy court altogether. For an organization that was until recently the most potent single-issue lobby in the U.S., none of the possible outcomes are great. LaPierre is trying to use the bankruptcy process to escape what he claims is political persecution by New York’s elected leaders and reincorporate the group in gun-friendly Texas. In the New York lawsuit, filed last August seeking to dissolve the NRA, Attorney General Letitia James alleged that LaPierre has spent hundreds of thousands of dollars of NRA funds for private plane trips for himself and his family, among many other indulgences. If the bankruptcy case is dismissed, James would have an easier time seizing the group’s assets, should she win her lawsuit. The NRA has called James’s suit a baseless attack on the Second Amendment timed to have maximum impact during the election cycle. For more than two weeks, U.S. Bankruptcy Judge Harlin “Cooter” Hale in Dallas listened to testimony about palace intrigues, shredded notes and excessive personal spending. The dispute pits several entities against the NRA. Allied with James is the gun group’s former ad agency, Ackerman McQueen Inc., which claims the bankruptcy filing was made in bad faith and should be dismissed. Even the U.S. office that monitors bankruptcies said at the end of the trial that the NRA doesn’t belong in Hale’s court. Meanwhile, a rebel NRA director has asked the judge to let the bankruptcy continue — but start a new investigation of the group’s management and board. The NRA responded to a request for comment on the case by referring to statements its attorney, Gregory Garman, made during the trial. In his closing arguments, Garman admitted that the testimony had included “cringe-worthy” evidence about the group, at one point saying, “Does anyone want to hear about your CFO taking the Fifth? Of course not.”

Bishop of Buffalo Michael William Fisher announced, in conjunction with the Movement to Restore Trust, how the diocese will be looking to help move the clergy forward following years of sexual abuse cases. Those cases lead to the declaration of bankruptcy last February, WKBW.com reported. "There are issues that we need to confront in the days and weeks ahead and that is something that I cannot do alone," Bishop Fisher said. The Bishop says those issues will be confronted through new initiatives. The diocese will group parishes together in "families" looking to increase participation and changing the way Catholic education is done. What was not address, was how the diocese will assure the clergy that the sexual abuse and resulting cover ups will never happen again. "They spent all of this time trying to establish a road to renewal and to build trust when they still haven't done anything to address the problem that put them in this very place," Kevin Koscielniak, founder of Buffalo Survivors Group, said.

Hertz Global Holdings Inc. said it’s seeing a boost in travel demand despite reporting a 33% drop in revenue in the three months through March 31, Bloomberg News reported. The company reiterated that it’s on track to emerge from bankruptcy in June. It’s weighing plans from two sets of suiters to take the company out of chapter 11. As the nation emerges from COVID-19 restrictions, travel demand has come back and more consumers are seeking car rentals. Hertz is in talks with potential bankruptcy plan sponsors and said in a regulatory filing Friday that a group including Centerbridge Partners, Warburg Pincus and Dundon Capital Partners intends to counter a proposal from Knighthead Capital Management and Certares Management that the car renter had deemed superior. An auction to determine the highest bidder between the dueling groups is scheduled for May 10, with a hearing to approve the final result set for May 14.

The Crabcake Factory at 120th Street in Ocean City will head to auction this month after the business declared bankruptcy back in the fall, having owed thousands to various groups, the Salisbury (Md.) Daily Times reported. Bidders will have until May 19 to place bids on the restaurant's "furniture, fixtures, equipment, royalties and tangible and intangible assets," according to Alex Cooper Auctioneers, organizer of the auction. The opening bid for the restaurant is currently set at $325,000. Interested parties will be able to purchase tangible assets like Crabcake Factory's t-shirts, hats and memorabilia, as well as dining and kitchen equipment, according to the auction company. The restaurant is putting its royalties on the auction block as well, which were valued at about $62,769 in 2019 and $51,580 last year, according to the auction company. Crabcake Factory will also auction off its liquor license, business name, website domain and customer list.