%1

Two Sackler family members who previously served on OxyContin maker Purdue Pharma LP’s board have agreed under pressure to testify this week before a U.S. House of Representatives panel examining the nationwide opioid epidemic, avoiding subpoenas threatened by the committee’s chairwoman, Reuters reported. David and Kathe Sackler reached an agreement in recent days with the House Oversight Committee to appear at a hearing set for Thursday, according to a memo yesterday from Democratic Chairwoman Carolyn Maloney to members of the panel. The two are among the Sackler family members who own Purdue. Purdue Chief Executive Craig Landau is also slated to testify at the hearing, the memo said. Landau was not at any point threatened with a subpoena. The opioid epidemic has claimed the lives of roughly 450,000 people in the United States since 1999 due to overdoses from prescription painkillers and illegal substances such as heroin and fentanyl, constituting an enduring public health crisis. Purdue reaped more than $30 billion from opioid sales over the years that enriched Sackler family members, and it funneled illegal kickbacks to doctors and pharmacies, investigations have found. Purdue in November pleaded guilty to criminal charges over its handling of OxyContin, which included defrauding the U.S. Drug Enforcement Administration and paying illegal kickbacks to doctors and a healthcare records vendor, all to help keep opioid prescriptions flowing. The plea deal was part of a broader settlement allowing the company to effectively sidestep paying billions of dollars in penalties. Sackler family members agreed to pay $225 million to resolve Justice Department civil claims that they disputed. They were not criminally charged. The Justice Department contends that the settlement, which foregoes most of a $2 billion forfeiture on the condition Purdue receives court approval for its bankruptcy plan, allows more money to flow to U.S. communities suffering from the opioid epidemic.

Purdue Pharma LP creditors pressing for confidential documents have provided “no evidence” that members of the billionaire Sackler family committed crimes or fraud while managing the opioid maker, lawyers for the family argue in court papers, Bloomberg News reported. States suing Purdue say that the privileged documents could help show that billions of dollars transferred out of the firm in recent years should belong to creditors. The family has denied allegations of wrongdoing and is fighting to keep the documents confidential. The ongoing battle took a turn in October when Purdue agreed to plead guilty to three felonies related to its handling of OxyContin. Members of the Sackler family that own and previously helped manage the company agreed to a separate $225 million civil settlement, without admitting wrongdoing. In papers filed alongside the civil settlement, the U.S. Department of Justice alleges that despite knowing in 2012 that the legitimate market for opioids had contracted, members of the Sackler family “requested that Purdue executives recapture lost sales and increase Purdue’s share of the opioid market,” resulting in the approval of an “aggressive marketing program” that led to the over-prescribing of the drugs. Creditors cited that deal and Purdue’s plea agreement as evidence of wrongdoing by the Sacklers, but lawyers for the family members point to their continued denial of any misconduct — neither deal included an admission of wrongdoing from the family members. The settlements will provide “substantial funding to communities in need, rather than to years of legal proceedings,” members of the family said in an October statement.

Defunct coal company Blackjewel LLC, which left hundreds out-of-work when the business collapsed last year, has filed a lawsuit accusing its founder and former chief executive of using his position to enrich himself and his family members at the company’s expense, WSJ Pro Bankruptcy reported. Jeff Hoops Sr., who resigned as CEO days after the coal producer filed chapter 11 last July, signed deals with other companies he or his family controlled that extracted millions of dollars from Blackjewel in the years leading up to the bankruptcy, according to a lawsuit filed Thursday in the U.S. Bankruptcy Court in the Southern District of W.Va., by lawyers who are liquidating the company. The lawsuit seeks to recover money from Hoops and his other businesses for what Blackjewel said were transactions that placed his financial interests above the company he founded and led until its failure. Blackjewel’s investigation of Hoops is one of the open-issues remaining in the company’s bankruptcy, which attracted national attention and scrutiny from the U.S. Labor Department after laid-off workers in Cumberland, Ky., spent weeks blocking a shipment of coal in protest of not receiving their final paychecks. Ultimately, the business receiving the coal shipment agreed to pay more than $5 million to cover the workers’ back pay.

About 40 days after it filed for chapter 11 protection, Lehigh Valley Mall co-owner PREIT has completed its financial restructuring and emerged from bankruptcy, the Allentown, Pa., Morning Call reported. PREIT, the largest mall owner in Philadelphia, filed for chapter 11 on Nov. 1 with a pre-packaged plan to bolster its financial flexibility and restructure its debt, after the coronavirus pandemic wreaked havoc on the brick-and-mortar retail world. Following the expedited process, PREIT said Friday it now has access to up to $130 million of new capital to support its operations. The company’s debt maturity schedule also has been extended.

A 110-year-old Green County, Wis., cheese cooperative has filed for bankruptcy but the farmers who own the co-op and supply milk to the Twin Grove facility have found temporary buyers for their milk, the Wisconsin State Journal reported. Maple Leaf Cheese Cooperative and Maple Leaf Cheesemakers failed to reach agreement on a contract, and production at the plant ended this week. The co-op, which owns the building and some of the equipment inside, filed for chapter 11 protection on Wednesday to restructure its debts so it could buy more time to find a new partner to make cheese at the plant. The 25 farmers have found temporary markets for their milk, but the hope is to reopen the cheese plant in the next three to four months so the farmers can return to supplying milk to the plant, located southeast of Monroe, Wis. The cooperative is hoping that the bankruptcy court will authorize payments owed to patrons for milk delivered prior to Wednesday’s petition date. Maple Leaf Cheesemakers announced in October that it would cease production at the Twin Grove plant in early December, which left farmers scrambling to find new homes for the combined 3.5 million pounds of milk they supplied monthly to the cheesemakers.

Propane supplier Ferrellgas Partners LP has reached a prearranged deal with bondholders for the holding company with no employees to file for bankruptcy while keeping its operations out of chapter 11, WSJ Pro Bankruptcy reported. The proposed deal will allow the company’s employees, as well as chairman and interim chief executive James Ferrell, to retain ownership of operating company Ferrellgas LP. “We have a reached an agreement with a substantial majority of our noteholders that will preserve our almost 100-year-old history and maintain ownership by our nearly 5,000 global employees,” Ferrell said. The parent company, Ferrellgas Partners, plans to file for bankruptcy in the U.S. Bankruptcy Court in Wilmington, Del., the company said in a regulatory filing Friday. Under a pre-packaged bankruptcy plan, the company will convert over $350 million in notes at the parent company into ownership units. Ferrellgas has been in forbearance since the summer on the $350 million in parent company notes that came due on June 15, and holders of 74 percent of those notes have agreed to the deal under which the parent company will file for bankruptcy.

Sable Permian Resources LLC has ended the threat of clawback attempts by junior creditors irked about the $16 million in executive bonuses the Texas fracker handed out to top executives months before it went bankrupt, WSJ Pro Bankruptcy reported. Sable Permian has reached a settlement with the junior creditors who had accused the company of timing its bonuses “with the express purpose” of evading bankruptcy-court supervision, according to documents filed with the bankruptcy court on Wednesday. In exchange for dropping the threat of litigation over the bonuses, and agreeing to back the restructuring and grant broad legal immunity, junior creditors will share $11 million in cash and warrants that entitle them to buy up to 10 percent of the equity of the reorganized fracker, provided the company is profitable once it emerges from bankruptcy. To dodge legal restrictions on bonus pay during bankruptcy, many troubled companies during the COVID-19 pandemic have paid tens of millions of dollars to corporate leaders just before filing for court protection, including retention bonuses that are severely restricted in the bankruptcy code. Sable Permian was one of those companies, handing out compensation to 18 corporate insiders before it filed for bankruptcy in June.

The U.S. Bankruptcy Court for the District of Vermont in Burlington confirmed the chapter 11 reorganization plans of Springfield Medical Care Systems and Springfield Hospital, allowing the two related organizations to exit bankruptcy, the Valley News reported. Bankruptcy Judge Colleen A. Brown confirmed the exit plans, which hinge in large part on exit funding from the state of Vermont, in hearings yesterday. The confirmation of the plans is the final step in the reorganization process the two related entities began in June 2019 when they faced a total of roughly $20 million in debt. As a result of the restructuring, the two organizations — the hospital and the health care system’s outpatient clinics — will have separate boards of directors, but will continue to work together to provide care to patients.

Portland, Ore.-based Blue Star Donuts, which filed for chapter 11 protection in August, emerged from those protections earlier this month with a reorganized business plan, Restaurant Business reported. Blue Star received new capital from investment group Sortis Holidings, which sponsored the chapter 11 plan, to fund new growth and resolve disputes with creditors, the chain said. Blue Star, which launched its gourmet doughnut concept in 2012, had eight units pre-pandemic. It has since permanently closed four of those locations. Blue Star has added new wholesale partnerships with area grocery stores, including New Seasons and Green Zebra Grocery. It is also expanding its shipping business, the chain said.

Shareholders of Fannie Mae and Freddie Mac got a mixed reception at the U.S. Supreme Court on a lawsuit that seeks billions of dollars and could affect the push to end government control of the mortgage giants, Bloomberg News reported. Hearing arguments by phone yesterday, the justices considered whether investors can challenge the 2012 agreements that let the federal government collect more than $300 billion in profits from Fannie and Freddie. A ruling in the investors’ favor in the case would give them a chance to collect a massive settlement. Most justices directed tough questions at lawyers for both sides. Chief Justice John Roberts asked a government attorney to respond to the investors’ contention that “their stock was completely wiped out in a unique way.” But later Chief Justice Roberts told a lawyer for the investors that “this was a lifeline thrown to your client.”