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A creditor group that holds roughly $3.2 billion in Endo International PLC debt said it is weighing a rival bid to purchase the pharmaceutical company’s assets out of chapter 11, WSJ Pro Bankruptcy reported. The group, comprising more than a dozen institutions that own a cross section of Endo’s bank and bond debt, is a potential challenger to a stalking-horse bid, which sets a minimum for others to beat, that the company announced when it filed for bankruptcy this week under the weight of opioid litigation. The first-lien creditors behind the stalking-horse bid have agreed to acquire the business out of chapter 11 in exchange for forgiving $6 billion in company debt. The cross-holding group includes J.P. Morgan Investment Management Inc., Citadel Equity Fund and funds managed by Franklin Advisers Inc. and Oaktree Capital Management LP, according to papers filed on Thursday in the U.S. Bankruptcy Court in New York. Andrew Rosenberg, a lawyer representing the group, said during Endo’s debut bankruptcy hearing Thursday that his clients don’t believe “the keys to this company” should be turned over to the stalking-horse bidders. The leading bid, he said, provides a starting point for a sale of the business and nothing more. The creditor group formed in April 2021 and negotiated for months on a potential restructuring, but talks with Endo cooled off in the weeks leading up to the bankruptcy filing because the price of the drugmaker’s debt had fallen, Mr. Rosenberg said. But the price of Endo’s first-lien debt rebounded after the company released information showing it “vastly outperformed” negative first-quarter guidance, Mr. Rosenberg said, adding the drugmaker’s second-lien debt has also experienced a similar rebound. “We definitely are considering a bid but we’re not promising what we’ll do in these cases yet,” Mr. Rosenberg said.

A small organization that operates a massive database of Idaho patient medical records filed for bankruptcy on Friday, reporting it owes creditors $4 million and is defending itself in three lawsuits, Boise State Public Radio reported. Chapter 11 bankruptcy will allow the Idaho Health Data Exchange to keep operating while it pays creditors and works through litigation, according to its bankruptcy attorney, Matthew T. Christensen of the Johnson May law firm in Boise. The health data exchange is a nonprofit organization that provides a centralized repository of health records. It allows participating health care providers to see each other’s records for individual patients — so that, for example, a primary care doctor in Coeur d’Alene, Idaho, could access X-ray records for their patient who was treated for a broken bone in Nampa. The IHDE currently lists 194 health care providers and organizations among its participants, including the state’s largest health systems. The Idaho Health Data Exchange launched in 2009 and relied mainly on government funds intended to modernize health records infrastructure. For example, it received $5.9 million of federal funding in 2010 as the designated health information exchange for Idaho. More recently, the health data exchange received millions of dollars of federal funds per year through the Idaho Department of Health and Welfare. That income stream ended when the HITECH Act, a 2009 law, expired last year, according to the health data exchange’s executive director and its bankruptcy attorney.

A federal judge ordered three of the country’s largest pharmacy chains to pay $650.6 million to two Ohio counties that they were found to have flooded with prescription painkillers. The court said Wednesday in a landmark judgment that CVS, Walgreens and Walmart must bear some of the cost that the opioid epidemic has wrought on Lake and Trumbull counties, outside Cleveland, the Washington Post reported. The award comes after a first-of-its-kind federal trial targeting the three major retailers, which have some of the deepest pockets left in the legal battle over the epidemic. Many other major drug distributors and makers have settled or filed for bankruptcy. A jury ruled last year that the pharmacies played a significant role in the crisis faced by the two counties. U.S. District Judge Dan A. Polster in Cleveland wrote this week that the pharmacy chains had dispensed the drugs “without effective controls and procedures” to prevent the pills from being abused and resold and are thus partially responsible for the damage the epidemic has caused in the two communities. The retailers will also be required to train personnel on the dispensing of controlled substances, create a hotline through which patients and employees can report inappropriate sales of painkillers, and appoint a controlled-substance compliance officer to review prescription-validation processes. The order is expected to be a bellwether for thousands of other communities trying to hold pharmacies responsible for their role in the opioid epidemic, which has killed half a million Americans since 1999, according to the Centers for Disease Control and Prevention. Earlier this month, a federal judge in San Francisco ruled that Walgreens fueled that city’s opioid epidemic by shipping and dispensing the addictive drugs without proper due diligence.

Endo International Plc filed for bankruptcy yesterday after reaching a $6 billion deal with some of its creditors, as the U.S. drugmaker seeks to settle thousands of lawsuits over its alleged role in the country's opioid epidemic, Reuters reported. The pharmaceutical company is the latest to file for chapter 11 to address opioid claims. Purdue Pharma, the maker of OxyContin, filed in September 2019, while Mallinckrodt Plc, a generic opioid manufacturer, recently emerged from bankruptcy. "By definitively addressing the more than $8 billion of debt that has burdened our balance sheet and establishing a pathway to closure with respect to the thousands of opioid-related and other lawsuits that the company has been defending at an unsustainable cost, we will be able to move forward...," Endo's Chief Executive Officer Blaise Coleman said in a statement. The company's chapter 11 bankruptcy filing in the Southern District of New York showed assets and liabilities in the range of $1 billion to $10 billion. The creditors, who will also assume some of the company's liabilities, will substantially control all of its assets, Endo said. The company also reached a deal with U.S. state attorneys general to provide $450 million over a period of 10 years, resolving allegations that the company boosted opioid sales using deceptive marketing, and bans the marketing of its opioids forever, according to the office of Massachusetts AG.

A Johnson & Johnson subsidiary urged a federal appeals court to uphold the controversial legal strategy it used to move to bankruptcy roughly 38,000 lawsuits linking its talc-based products to cancer, WSJ Pro Bankruptcy reported. The subsidiary, LTL Management LLC, said in court papers filed on Monday that chapter 11 is the only option for compensating all claimants relatively quickly. LTL, which J&J created last year to move mass talc litigation to bankruptcy, laid-out a defense of its strategy in its filing in the Third U.S. Circuit Court of Appeals, which is considering a request by injury claimants to have the subsidiary’s chapter 11 bankruptcy thrown out of court. The outcome of the appeal could dictate whether J&J’s restructuring strategy catches on more widely among companies facing costly litigation over allegedly dangerous or defective products. Appeals judges are expected to scrutinize a type of corporate restructuring in which companies facing mass litigation create a new subsidiary with minimal business operations and under Texas law assign it responsibility for tort liabilities before placing it in chapter 11.

A federal judge criticized 3M Co.’s attempt to use the protections of chapter 11 to resolve mass injury claims by U.S. military veterans, but will allow a bankruptcy court to decide whether to shield the company from ongoing litigation, WSJ Pro Bankruptcy reported. Judge M. Casey Rodgers in the U.S. District Court in Pensacola, Fla., declined on Sunday to prohibit 3M from contesting its full liability for injury claims alleging that earplugs manufactured by the company’s Aearo Technologies LLC unit were defective. Aearo filed for chapter 11 protection last month, shortly after assuming liability for roughly 230,000 pending claims against the business and its publicly traded parent company, 3M. Aearo wound up in dire financial straits after that voluntary assumption of liability, which put it on the hook for the largest multidistrict litigation in U.S. history, according to the judge’s ruling. Plaintiffs’ lawyers had requested that 3M be prohibited from contesting its full liability for the alleged earplug injuries, saying it was attempting to re-litigate that issue in bankruptcy court after proceeding in the tort litigation as if it alone bore responsibility. A 3M spokesman said the company’s court filings show the chapter 11 process “offers a more efficient, equitable, and expeditious means to resolve this litigation. Claimants determined to be entitled to compensation will be paid sooner, and 3M and Aearo will be able to better focus on making products people depend on.” In her ruling, Judge Rodgers said 3M’s move to unload injury liabilities onto Aearo was devised to escape the multidistrict litigation for good because 3M was “displeased with the rulings of this court” and several jury verdicts against the company. Judge Rodgers said that 3M had never indicated in more than three years of litigation “that any entity other than itself was responsible” for the service members’ claims. The judge said she was “deeply concerned” about 3M’s “sudden, bankruptcy eve about-face regarding the entity responsible,” but said it wasn’t her place to prohibit 3M from mounting such a potential defense.

Endo International PLC, a pharmaceutical manufacturer facing thousands of lawsuits alleging it fueled the opioid addiction crisis, said Tuesday that it is likely to file for bankruptcy imminently, the Wall Street Journal reported. The company said that it is in negotiations with a group of senior lenders that it expects will result in an agreement for a chapter 11 filing. Endo also said that it is in discussions with opioid litigants as well as other creditors but didn’t say that it has reached a proposed deal with them. Endo, domiciled in Ireland with operations in Malvern, Pa., has been grappling for years against opioid-related lawsuits from state and local governments over its painkiller Opana. The company, which has denied liability in connection with the opioid crisis, discontinued Opana in 2017 at the request of the Food and Drug Administration. Endo has reached piecemeal settlements over opioid claims with states including Florida, Texas, New York, West Virginia and Alabama. But it still faces about 3,500 lawsuits from state and local governments, private healthcare providers and individuals. The company has also been struggling under $8 billion of debt as earnings declined in part driven by the loss of exclusivity for a key drug, Vasostrict.

Credit-score provider VantageScore Solutions LLC said it would stop factoring all medical debts that are in collections into the latest versions of its scores, the Wall Street Journal reported. VantageScore’s decision goes beyond a recent move by Equifax Inc., Experian PLC and TransUnion to remove many medical collections from people’s credit reports. The three companies own VantageScore, which competes against Fair Isaac Corp., the creator of the more widely used FICO credit scores. Hospitals and other medical providers send unpaid bills to collection companies, which then report the accounts to the credit-reporting firms. The information often lowers people’s credit scores, which makes it harder to get approved for credit or to get loans on affordable terms. VantageScore expects the change to take place in October. Millions of people with medical debts in collections could see a score increase of as much as 20 points, the company said.

A legal advocacy group for students filed a federal petition urging the agency that oversees the National Health Service Corps to change its rules to address the penalties facing healthcare workers who involuntarily violate contracts they signed to ease their student debt, the Wall Street Journal reported. The National Student Legal Defense Network, a nonprofit founded by former Education Department officials focused on addressing problems in the higher-education system, filed a 71-page petition on Monday, part of a formal process that allows individuals or entities to push a federal agency to change its rules. The group has previously been successful in some efforts to change federal rules on behalf of student borrowers. The network turned its sights on the Service Corps after a Wall Street Journal investigation in February found that job disruptions caused by the pandemic have put more clinicians — who through the Service Corps pledge to work in places with too few medical providers in exchange for help repaying their student loans — in violation of their contracts. That leaves many of them facing penalties many times the amount of aid they received. Among the changes the petition seeks is a rule that would automatically waive the penalties for healthcare workers who were terminated by their clinics through no fault of their own — for example, due to pandemic-related cuts — and who were unable to find a similar replacement within an hour of their home. The program’s penalties are written in law, meaning only Congress can change them. But agencies have leeway in developing regulations on how to implement the law, a process known as rule-making. In the case of the 1987 bill that created the loan repayment program, Congress granted the health secretary authority over how to determine whether someone is eligible for a waiver, which would permanently excuse a participant from their obligations.