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Oxycontin maker Purdue Pharma on Friday asked the U.S. Supreme Court to reject the U.S. Department of Justice's request to delay its multi-billion-dollar bankruptcy settlement resolving thousands of lawsuits against it over the opioid epidemic, Reuters reported.The department's bankruptcy watchdog last week asked the Supreme Court to pause the settlement, which would shield the company's Sackler family owners from opioid lawsuits in exchange for a $6 billion contribution to a broader settlement with states, local governments and victims of addiction. The Department of Justice (DOJ) asked the high court to put the deal on hold after a federal appeals court rejected a proposed delay. Purdue on Friday argued that a delay would be destructive, imperiling a settlement that has the support of all major stakeholders, including state attorneys general and people affected by the opioid crisis. The DOJ's position would "take billions of dollars out of opioid abatement programs that are sorely needed" and potentially "deprive victims of any meaningful recovery" if the deal falls apart, Purdue's lawyers wrote. That position was echoed by a group representing 60,000 people who have filed personal injury opioid claims in Purdue's bankruptcy.

The Archdiocese of San Francisco will "very likely" file for bankruptcy in order to deal with a wave of lawsuits alleging child sexual abuse by its priests and other employees and volunteers going back decades, the archbishop said, according to a Los Angeles Times report. In an open letter on Friday, Archbishop Salvatore J. Cordileone said the option was the result of "much contemplation and prayer" and arose from discussions with lawyers and financial advisors. More than 500 civil lawsuits alleging abuse were filed against the Catholic archdiocese between 2020 and 2022, when California temporarily lifted the statute of limitations on such allegations against churches and other institutions. Cordileone said that filing for chapter 11 bankruptcy would allow the archdiocese "to deal with the hundreds of cases collectively rather than one at a time" and "reorganize its financial affairs to continue its vital ministries to the faithful and to the communities that rely on our services and charity." The archdiocese would not be the first in California to take such action. Bankruptcy has been filed or mulled by dioceses across the state, including in Oakland, Santa Rosa, Sacramento and San Diego.

A U.S. bankruptcy judge has awarded junior creditors a 70 percent ownership stake in the post-bankruptcy oil producer Mesquite Energy, handing a defeat to senior lenders who argued they should own the entire business, Reuters reported. Thursday's ruling by Bankruptcy Judge Marvin Isgur in Houston settles an ownership dispute that has lingered since Mesquite's 2020 emergence from chapter 11 by setting a $200 million value for litigation claims pursued by junior creditors and awarding them a majority of the company's equity and a seat on its board. The senior lenders, Fidelity and Apollo Global Management, increased their stake in the business to 30% from 20% on account of the loan they extended to Sanchez at the start of its bankruptcy. Mesquite, then known as Sanchez Energy, filed for bankruptcy in 2019 with $2.3 billion in debt and emerged a year later through a reorganization plan that gave its top lenders 20% of the reorganized equity and set aside the rest for senior and junior creditors to fight over. The unusual arrangement allowed the company to emerge from bankruptcy without first resolving contentious disputes about the validity of the secured creditors' pre-bankruptcy liens on valuable oil and gas assets.

The judge overseeing the bankruptcy of Puerto Rico’s power utility granted it an additional week — for the second time in the past 10 days — to reach a deal with bondholders as talks are progressing, Bloomberg News reported. The island’s federally appointed financial oversight board, which is managing the utility’s bankruptcy, sought more time to negotiate with bondholders as it anticipates reaching an agreement with at least one creditor, a lawyer for the board said in a court document filed Thursday. U.S. District Court Judge Laura Taylor Swain agreed to the board’s request to push out the deadline to file an amended debt-restructuring proposal to Aug. 11. The board had made a similar request last week, and had been allowed to postpone an original July 28 deadline to Aug. 4. The board “continues to believe the prospects of at least one major settlement is high and possibly two major settlements are sufficient to avoid filing an amended plan this week,” a lawyer for the board wrote in the request for more time. The Puerto Rico Electric Power Authority, called Prepa, has been in bankruptcy for six years and is seeking to reduce nearly $9 billion, the commonwealth’s last remaining sizable debt restructuring. Resolving the utility’s obligations will help stabilize electricity costs on the island and allow officials to focus on modernizing its power grid. Negotiations between the board and Prepa’s bondholders increased after Swain in June capped at $2.38 billion the amount of utility net revenue that bondholders have a claim to.

Party City Holdco Inc. is considering splitting up its balloon manufacturing and retailing businesses as the latter charts a course out of bankruptcy, Bloomberg News reported. Party City has held confidential talks with debt holders about spinning off its Anagram unit. Anagram has a debt stack separate from its parent and didn’t follow most other Party City units into chapter 11 bankruptcy in January. But the businesses are deeply linked. Party City accounts for around 40% of Anagram’s revenue, according to a Fitch Ratings report from July. The retailer buys almost all of its balloons from Anagram, but has threatened to abandon that contract during bankruptcy. Anagram’s debt arose from a 2020 financing in which some Party City creditors exchanged their existing holdings to move closer to the prized balloon manufacturer. It was an ill-fated attempt to save Party City — which saw its sales plummet when the COVID-19 pandemic crimped social functions — from bankruptcy. Party City recently revised a key deal with some of its biggest lenders, tweaking its plan to exit chapter 11 protection after struggling to meet financial projections.

Alex Mashinsky, the founder and former chief of the now-bankrupt cryptocurrency lender Celsius Network, must face a lawsuit by New York Attorney General Letitia James accusing him of civil fraud, a Manhattan state court judge ruled on Friday, Reuters reported. Justice Margaret Chan said the attorney general sufficiently alleged that Mashinsky defrauded investors by touting Celsius as a safe alternative to banks and concealing its risks, including hundreds of millions of dollars of investment losses. Judge Chan also said James could pursue some claims under the Martin Act, a powerful state securities law, and that the "earned interest accounts" that Celsius offered customers qualified as securities under state law. The attorney general's lawsuit "supports a reasonable inference that the harm suffered by investors flowed, at least in part, from Mashinsky's alleged misrepresentations made in New York concerning Celsius' overall financial health and investment safety," Chan wrote in a 25-page decision.

A 10-bedroom home in the Southampton, N.Y., compound associated with Canadian art magazine publisher Louise Blouin was placed under chapter 11 bankruptcy protection this week ahead of a scheduled foreclosure auction, WSJ Pro Bankruptcy reported. The mansion is part of the two-home oceanfront compound on Gin Lane known as La Dune. The other home in the complex has already been under chapter 11 since April 2022, according to court documents filed with the U.S. Bankruptcy Court in Central Islip on Long Island, N.Y. Both are owned by entities led by Blouin, according to court papers. The two-home compound on a 4-acre lot has been on and off the market since 2016. The most recent listing price was $150 million, according to the listing website. While the two homes are located in the same complex, they can be sold separately, according to Geoff Gifkins of Nest Seekers International, which is marketing the property. Gifkins said on Friday that while he wasn’t privy to the details of the recent bankruptcy filing, he knew that the property owners have spent a “considerable amount of money over the last year restoring the properties.”

An Eastern Carolina hospital is closed and will file for bankruptcy, WITN.com reported. Quorum Health, which operates Martin General Hospital, said that it was forced to “suspend operations today and to file for bankruptcy.” The company has a lease with Martin County to operate the hospital until 2029. Quorum said that they proposed reverting the hospital back to the county, but according to a news release, Martin County “chose not to respond to our proposal.” The hospital says it has faced financial challenges due to a declining population and more people in the county going to other hospitals. It said in 2022, Martin General lost $13 million. Martin General said it reached out to eight organizations, including several local and regional health systems and none were willing to purchase or assume operation of the hospital. Martin County Commissioner Joe Ayers says that he was notified that the hospital diverted all EMS calls at 10 a.m. They are taking no new patients at this time, Ayers said. Read more..

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.

Casco Development filed for bankruptcy on a $539 million luxury condo in Chelsea that never got off the ground, The Real Deal reported. The firm’s Noam Teltch signed the chapter 11 filing as the company looks to sell the debt-ridden, vacant development site at 540 West 21st Street in New York City. Secured and unsecured debt at the property totals $256.7 million, based on an analysis of the bankruptcy filing. Casco is controlled by a foreign real estate investor named Uri Chaitchik, Crain’s reported in 2014 when the firm bought the site from the Atlantic Foundation. The foundation’s John Johnson, an heir to the Johnson & Johnson fortune, reportedly offered to return $2 million to the developers if their project achieved LEED certification.

FTX Dubai, which was created just months before the global crypto exchange collapsed last November, is asking to be exempt from U.S. bankruptcy proceedings, TheStreet.com reported. “FTX Dubai is balance-sheet solvent. Therefore, the debtors believe that a solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets," court documents said. Although the parent company went into bankruptcy proceedings in November, its decision to wrap up 102 affiliated entities scattered across the world in its proceedings has caused problems. FTX Dubai, for example, was owned by FTX's Europe arm. Now, FTX Dubai is claiming it was not engaged in business before the FTX collapse and has "no reasonable likelihood of rehabilitating its operations." It only wanted the ability to pay employee wages and benefits. The issue is pending a hearing at the end of the month.