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A bankruptcy judge on yesterday concluded a five-day court hearing to examine whether a chapter 11 filing of 3M Co.'s earplug unit Aearo Technologies LLC should be thrown out of court, MarketWatch.com reported. Following a federal appeals court's decision to dismiss Johnson & Johnson's first chapter 11 filing to freeze its talc lawsuits, 3M's earplug lawsuit claimants in February petitioned Judge Jeffrey Graham with the U.S. Bankruptcy Court in Indianapolis to dismiss Aearo's bankruptcy filing. J&J's case was dismissed because the federal appeals court deemed its bankrupt unit was not in financial distress. A significant time in the Aearo hearing was spent to argue the 3M unit's financial condition at the time of bankruptcy filing in July 2022. The judge is expected to rule in several weeks.

The Pill Club, a birth control and telehealth provider backed by an affiliate of venture financing firm TriplePoint Capital LLC, went bankrupt after California authorities accused the startup of fraudulently billing the state’s Medicaid program for contraceptives customers didn’t order and counseling sessions it never provided, Bloomberg News reported. The San Mateo, California-based business is trying to sell itself in chapter 11 as it braces for the possibility that other states will launch additional investigations into its billing practices. The company, also known for a time as Favor, filed bankruptcy months after agreeing to pay a total of $18.275 million to settle California regulators’ claims without admitting wrongdoing. The Pill Club is finalizing an agreement to sell the business in chapter 11, a deal that would be subject to higher offers, company lawyer Timothy Walsh said Friday during a court hearing. Walsh didn’t disclose the name of the potential buyer. The startup is also discussing with TriplePoint and other parties the terms of proposed chapter 11 financing, which could be finalized over the weekend, he said. TriplePoint Venture Growth BDC Corp. is the collateral agent for a $30 million loan to The Pill Club and holds a senior lien on the company’s assets, court papers say. TriplePoint also owns shares in the startup, according to a securities filing. Walsh said The Pill Club and TriplePoint are currently at an impasse over a request to continue using lenders’ cash, though he said the company is hopeful an agreement will be reached soon. TriplePoint did agree to The Pill Club’s use of as much as $850,000 to pay wages for its approximately 220 employees, said Dan McGuire, another lawyer for startup.

Pfizer Inc. has completed its $36.4 million acquisition of assets of Lucira Health Inc., the Emeryville company that filed for bankruptcy protection after developing the first at-home molecular diagnostic test for COVID-19 and recently won approval for a combined COVID-flu test, the San Francisco Business Times reported. Pfizer, the maker of a COVID vaccine and COVID treatment, was chosen last week by Lucira and a committee of creditors over a higher bid by a unit of Aditxt Inc. Lucira and the committee said Pfizer's resources gave it the best ability to not only close the deal but carry on Lucira's product line. The bidding for Lucira's assets pitted Pfizer, the world's largest drug maker by revenue with nearly $23 billion in cash, equivalents and short-term investments, against the Pearsanta unit of immune system-focused Aditxt, which had to borrow $1 million to make the deposit to participate in the auction. Pfizer's bid consisted of $5 million cash and more than $20 million to cure various Lucira contracts and another $11 million for the manufacturer of the test kits, Jabil Inc. If the total cures come in under the $20 million mark, the difference will go to the Lucira estate.

Beverly Hospital filed for bankruptcy on Wednesday, a step that hospital officials said was needed to avoid the closure of the Montebello facility, the Los Angeles Times reported. Hospital officials said their goal is to find a buyer to keep the hospital open and maintain crucial services for residents in Montebello and nearby communities, including El Monte, Whittier and East Los Angeles. They laid the blame for their financial plight on surging costs that they said had outpaced government reimbursements to care for low-income patients. “The need to restructure is regrettable, but to save the hospital, we were forced to take these necessary steps,” Beverly Hospital President and Chief Executive Alice Cheng said in a statement announcing that the facility had filed voluntary petitions for Chapter 11 under the bankruptcy code. “It’s a sad situation, but it’s essential for us to continue to provide healthcare for the people of our community.” Hospital officials said they had secured up to $13 million in financing to enable the hospital to keep operating without interruption as it pursues options for a sale, aiming to find a buyer “who can ensure the longevity of the hospital so that it can continue to serve the communities that need it the most.”

KKR & Co.’s Envision Healthcare Corp. is exploring a chapter 11 bankruptcy that would give control of the physician-staffing company to its creditors, WSJ Pro Bankruptcy reported. Envision is in negotiations with some of its lenders about a restructuring that could result in KKR, its private-equity owner, writing down its stake, these people said. The staffing company has struggled with debt, litigation and other headwinds since KKR bought it in 2018 for roughly $6 billion, excluding debt, in one of the private-equity firm’s biggest healthcare deals. Large creditors to Envision have been signing nondisclosure agreements to gain access to the company’s financial details and discuss a recapitalization. Some proposals include transactions where lenders would swap debt for equity, diluting or wiping out KKR’s equity stake in the process. Envision could file for chapter 11 protection as part of the recapitalization efforts, although it is possible that the company will be able to complete the transactions out-of-court and avoid filing for bankruptcy. The Nashville, Tenn.-based company missed a roughly $40 million interest payment due Saturday under some of its unsecured bonds, the people said, kicking off a grace period that could trigger a default if Envision fails to pay within 30 days.

Hospitals are joining the gig economy. Some of the nation’s largest hospital systems including Providence and Advocate Health are using apps similar to ride-hailing technology to attract scarce nurses, the Wall Street Journal reported. An app from ShiftKey lets workers bid for shifts. Another, CareRev, helps hospitals adjust pay to match supply, lowering rates for popular shifts and raising them to entice nurses to work overnight or holidays. The embrace of gig work puts hospitals in more direct competition with the temporary-staffing agencies that siphoned away nurses during the pandemic. The apps help extend hospitals’ labor pool beyond their employees to other local nurses who value the highly flexible schedules of gig work. The shift is among many ways hospitals are revamping hiring, schedules and pay to give nurses more control and to fill staffing gaps created by persistent labor shortages. Vacancies are straining many hospitals’ operations despite recent hiring gains at hospitals and reports of softer demand from some temporary-staffing companies.

Bankrupt drugmaker Sorrento Therapeutics Inc.’s subsidiary Scilex Holding Co. is exploring a sale of new stock to take advantage of a share-price rally as Sorrento charts a path out of chapter 11, WSJ Pro Bankruptcy reported. Shares in publicly traded Scilex, Sorrento’s largest asset, have more than doubled in value since its parent company filed for chapter 11 in February, closing at $14.80 on Wednesday to give Scilex a market capitalization of more than $2 billion. The run-up in Scilex shares came after it became a popular pick in some online investing forums geared toward small, nonprofessional traders. If the fundraising is successful, the new money could boost Sorrento’s value as it seeks to end its chapter 11 case and resolve the yearslong licensing dispute that drove the company into bankruptcy. A stock issuance could also dilute San Diego-based Sorrento’s roughly 51% stake in Scilex, which makes nonopioid painkillers and isn’t in bankruptcy itself. Sorrento and other Scilex shareholders can’t sell their holdings until a lockup period stemming from a recent merger deal runs out on May 11, according to court filings.

Bondholders of KKR & Co.’s Envision Healthcare Corp. have hired law firm White & Case LLP as the physician staffing company faces a looming payment deadline on its unsecured bonds, WSJ Pro Bankruptcy reported. Envision has a bond interest payment coming due Saturday and investors are concerned about whether it will pay because it is in technical default. The bondholder group, which formed recently, has said it represents a majority of the company’s outstanding bonds. Envision issued $1.2 billion of unsecured bonds due in 2026 in connection with its $6 billion purchase by KKR in 2018. Those bonds were recently quoted at around 4 cents on the dollar, according to market-data platform Solve, indicating that investors expect significant impairment. Envision has been in negotiations with some of its other creditors after missing a March 31 deadline to report its fourth-quarter financial results, triggering a technical default under the company’s loans.

A Johnson & Johnson unit said cancer victims who refuse to settle with the company are attempting to intimidate other claimants from signing onto an $8.9 billion deal to end lawsuits over allegedly tainted baby powder, Bloomberg News reported. The health-care giant is trying for the second time to use the bankruptcy of its LTL Management to round up support for a plan that would settle more than 40,000 lawsuits that allege baby powder contained talc that was tinged with asbestos, a toxic substance. LTL has the backing of 60,000 victims, or about two thirds of all claimants, lawyer Gregory M. Gordon said in federal court on Tuesday. The company must get to 75% to have a chance at winning approval for the deal from U.S. Bankruptcy Judge Michael Kaplan. The holdouts are working to block the company from reaching that goal, Gordon said. As the bankruptcy goes forward, LTL and J&J will present evidence to “show an aggressive, concerted effort by the plaintiff firms on this committee to scuttle this agreement through threats and intimidation directed at LTL, J&J” and plaintiffs who support the plan, Gordon said.