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Opioid overdose victims say the stringent documentation requirements effectively lock them out of making claims against Purdue, especially if their loved ones died a number of years ago, Bloomberg News reported. Some states require pharmacy records to be destroyed after a certain period of time for privacy reasons. Relatives face even more barriers in obtaining records of someone who died. Those who acquired opioids illegally wouldn’t generate any pharmacy paperwork at all. And physicians are only required to hold medical records for a certain number of years, varying by state. Taylor Wall of Andrews & Thornton, an attorney representing opioid victims in the Purdue bankruptcy, said Purdue’s trust distribution procedures are more complicated than those of Mallinckrodt Pharmaceuticals, a generic drug company that filed for bankruptcy in 2020, though they impose similar qualifications on proving the use of a qualified opioid. “The height of the opioid epidemic was at least somewhere between 2000 to 2010, depending on what state you may have lived in where the opioid epidemic really rose, so that makes obtaining records for a lot of individuals very difficult,” Wall said. According to the Centers for Disease Control, over 564,000 people died from opioid overdoses since 1999, including prescription and illicit opioids. Around 135,000 individuals filed personal injury claims against Purdue for their loss of loved ones and opioid addiction treatment expenses by the July 2020 deadline. People who had access to information necessary to fill out a claim weren’t initially required to submit medical records, said Cynthia Munger, a member of the Purdue Bankruptcy Ad Hoc Committee that sought to hold Purdue accountable during the bankrputcy on Accountability. During the early stages of the bankruptcy process, the notion of potential rejection due to lack of prescription proof was “not properly articulated up front, and later buried in pages of legalese,” she added.

Fidelity Investments and Apollo Global Management took control of a Texas driller with oil prices at historic lows in 2020, then kept the company alive until prices came back. Their payoff will likely be disappointing, WSJ Pro Bankruptcy reported. More than three years after Apollo, Fidelity and other top lenders to Mesquite Energy took over the company in chapter 11, a bankruptcy court stripped them of their controlling stake last week and left them with roughly 30% of the oil-and-gas company, saying the other 70% of its shares belong instead to its unsecured creditors. The allocation of equity marks an unusual coda to the bankruptcy process for Mesquite, which nearly went out of business when the COVID-19 pandemic crushed oil prices, only to see its assets soar in value as energy demand recovered. The biggest beneficiary of Thursday’s ruling, which can be appealed, is asset manager Benefit Street Partners, which lost money in the company’s 2020 restructuring but bet it could win some back by bankrolling litigation to wrest shares in the restructured company from Fidelity and Apollo, according to court records and people familiar with the dispute.

Instant Brands, maker of the Instant Pot pressure cooker and Pyrex glassware, received court approval on Tuesday to borrow an additional $30 million to fund itself through bankruptcy, Bloomberg News reported. The company has been negotiating with vendors critical to the production of its hallmark kitchen gadgets, and the talks made clear that Instant Brands needed additional money, according to company attorney Brian Resnick. The company has already spent $132.5 million of bankruptcy financing secured at the start of its chapter 11 case, according to court papers. “It became apparent as these negotiations proceeded that the debtors would need additional financing to honor the agreements and in order to maintain a stable business,” Resnick said in a bankruptcy hearing Tuesday. Meanwhile, the manufacturer is in the throes of soliciting interest from potential bidders to sell some or all of its assets. The bid deadline is September 7.

Ryan Salame, the former co-chief executive of FTX Digital Markets, is in negotiations with federal prosecutors to plead guilty to criminal charges following the implosion of the cryptocurrency exchange, Bloomberg News reported. The Republican megadonor may enter a plea as soon as next month to offenses including campaign finance law violations, according to the people, who asked not to be identified because the discussions aren’t public. It is unclear whether he will enter into a cooperation agreement with prosecutors and testify against FTX co-founder Sam Bankman-Fried. Salame’s former colleagues, Gary Wang, Caroline Ellison and Nishad Singh, have already pleaded guilty to playing a role in the alleged multibillion dollar fraud at the now-bankrupt crypto empire and will be key witnesses in the government’s case against Bankman-Fried.

WeWork on Tuesday raised doubt about its ability to stay in business as the co-working space provider faces losses and a dwindling cash pile amid major changes in the way people work, WSJ Pro Bankruptcy reported. WeWork, once one of the world’s most valuable startups worth $47 billion, said Tuesday excess supply of commercial real estate, greater competition for flexible space and uncertain economic conditions resulted in losses in the second quarter. The company has seen higher churn and lower demand than it anticipated, with memberships at its locations falling from a year ago, Interim Chief Executive Officer David Tolley said in its quarterly results. WeWork’s management also warned that “as a result of our losses…which have been impacted by the recent increases in member churn…substantial doubt exists about the company’s ability to continue as a going concern.” WeWork raised billions of dollars from firms like SoftBank, its largest financial backer, but its growth stalled after investors raised concerns over its charismatic co-founder Adam Neumann’s unorthodox management style and his related-party transactions with the company. He was ousted in 2019 and under new management WeWork went public in 2021 through a merger with a special-purpose acquisition company.

Electric-vehicle parts supplier Proterra filed for chapter 11 bankruptcy protection on Monday, making it the latest company to go belly up in an industry grappling with supply chain constraints, slowing demand and a funding drought, Reuters reported. The move comes weeks after Lordstown Motors filed for bankruptcy protection and put itself up for sale after failing to resolve a dispute over a promised investment from Foxconn. Proterra, whose shares nearly halved in value after the bell, listed its assets and liabilities in the range of $500 million to $1 billion. The company had a market value of $362 million as of last close. In January 2021, Proterra was valued at $1.6 billion, including debt, in a merger deal with a blank-check firm. Proterra, which makes electric buses as well as battery packs, said it intends to continue to operate in the ordinary course of business. It plans to file the customary motions with the bankruptcy court to use existing capital to fund operations. The company earlier this year announced plans for more job cuts and said it will combine electric bus and battery production in South Carolina as it looks to trim costs.

Western Global Airlines has filed for bankruptcy with a plan to cut its debt after the employee-owned cargo carrier faltered because of headwinds including the weakening global economy and higher costs, WSJ Pro Bankruptcy reported. The Estero, Fla.-based company yesterday filed for chapter 11 in the U.S. Bankruptcy Court in Wilmington, Del., and said it has a proposed restructuring deal in hand with holders of 85% of its 2025 senior unsecured notes that includes cutting its debt by $450 million. The company’s liabilities include $560 million in loans, a credit facility and notes, according to a sworn declaration by co-Chief Restructuring Officer Robert Del Genio. Western, which was founded in 2013, has 19 wide-body aircraft and provides services on six continents to governments and commercial customers that include the U.S. Defense Department, the U.S. Postal Service and UPS, according to court records and its website. The company has said that it was profitable until last year. It cited the lingering effect of the pandemic in China as another reason for its financial troubles. In June, Fitch Ratings, S&P Global and Moody’s Investors Service said they were withdrawing the company’s ratings due to a lack of information. Later that month, founder and Chief Executive Jim Neff bought the company’s $115 million of outstanding senior debt for $45 million.

The collapse of one of America’s largest trucking companies is reverberating across the economy, from domestic shipping and real-estate markets to Wall Street, WSJ Pro Bankruptcy reported. Yellow was a $5.2 billion business as recently as last year when it moved around 50,000 shipments a day in a trucking network that made it a fundamental part of the supply chains of hundreds of U.S. companies. The rapid wind-down of its business last month, capped by the shutdown of all operations and a bankruptcy filing in recent days, is leaving behind a trail of winners and losers as the 99-year-old trucker disappears from the highways. The most immediate winners are Yellow’s competitors in the less-than-truckload sector, known as LTL, a segment of the trucking industry that acts as a kind of circulatory system for the goods economy by having trucks carry cargo for multiple customers on the same trailer in fast-paced distribution networks. The clearest losers in Yellow’s demise are the company’s workers, who were laid off, dismissed and locked out of closed terminals and offices last month as the trucker wound down its business. The loss of some 30,000 jobs is the largest at a single company since Boeing at the end of 2020 announced it would cut its workforce by around 30,000 jobs, according to Challenger, Gray & Christmas, an outplacement services firm.

The University of Iowa has revealed plans to acquire Mercy Hospital on the heels of the organization's recent bankruptcy filing, the Iowa City Press-Citizen reported. Mercy "voluntarily" filed a bankruptcy petition, the company announced in a press release Monday morning. The 194-bed facility has served area residents since 1873. “Mercy Iowa City believes this plan is the best path forward to preserve our hospital operations,” said Tom Clancy, Chairman of the Board and CEO of Mercy Iowa City in a press release. “As we implement this plan, our dedicated Mercy Iowa City staff remain steadfast in their commitment to provide compassionate care to our community.” The State of Iowa Board of Regents will consider the university's proposed $20 million acquisition of Mercy's facilities and business operations at Tuesday morning's special session.
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The financially troubled healthcare sector will be the focus of the ABI Healthcare Program, September 18-19, 2023, in Nashville, Tenn. For more information and to register, click here.

U.S. trucking firm Yellow Corp. filed for chapter 11 protection yesterday and said that it would wind down, after struggling with a mounting debt load and following tense contract negotiations with the Teamsters Union, Reuters reported. The nearly 100-year-old company's bankruptcy filing in a Delaware court estimated assets and liabilities of $1 billion to $10 billion, with more than 100,000 creditors. The collapse of Yellow, formerly called YRC Worldwide, puts about 30,000 workers at risk when the freight industry is already grappling with a slump in volumes. Yellow said yesterday that it intends to fully pay back a $700 million loan former President Donald Trump's administration issued to bail out the long-troubled firm in 2020 under a pandemic relief program. The company has $1.3 billion in debt payments coming due in 2024, including a $567.4 million private-equity term loan in June and the U.S. loan in September.