%1

Idaho officials on Friday announced a $119 million settlement with drugmaker Johnson & Johnson and three major distributors over their role in the opioid addiction crisis, the Associated Press reported. Republican Gov. Brad Little and Republican Attorney General Lawrence Wasden said that it’s the second-largest consumer settlement in state history, trailing only the 1998 national tobacco settlement of $712 million. An Ada County judge on Wednesday approved the settlement that Little and Wasden had agreed to in August. The state’s participation made it eligible for a minimum of $64 million. It also opened the way for local government entities to take part, and all those eligible did so by the end of December, boosting the amount to $119 million. The money will address damage wrought by opioids, which the federal government declared a public health emergency in 2017. Johnson & Johnson and the three distributors finalized a national $26 billion settlement in February.

Lenders to Jordan Health Services, a Dallas-based home healthcare provider, have hired restructuring advisers in anticipation of negotiations on the company’s debt as it struggles with rising labor costs, WSJ Pro Bankruptcy reported. Jordan Health, which in 2018 combined with two other home health service providers, is grappling with the pressures of rising wages and the challenges of a merger integration process as well as about $1 billion in debt, the people also said. A group of senior lenders have hired law firm Gibson Dunn & Crutcher LLP and financial adviser PJT Partners Inc. The 2018 combination brought together the holdings of two private-equity firms. Kelso & Co., which owned Jordan Health, merged it with Blue Wolf Capital Partners’ Great Lakes Caring and National Home Health Care. The company’s attempt to stitch together the three operations has hit some bumps and weighed on its performance, people familiar with the matter said. Lenders are early in the process of assessing their options, and they could agree to a restructuring outside of bankruptcy. Jordan’s senior loans started sliding in March, trading down to just over 70 cents on the dollar on Wednesday from over 81 cents in mid-March, according to data provider IHS Markit.

A federal appeals court has agreed to review Johnson & Johnson’s use of a bankruptcy tactic to shift into chapter 11 mass litigation that alleges the company’s talc-based baby powder caused cancer, the Wall Street Journal reported. The U.S. Court of Appeals for the Third Circuit yesterday granted requests by talc injury claimants for an immediate review of an emerging strategy used by J&J and a handful of other large, solvent companies to freeze roughly a quarter of a million injury lawsuits through bankruptcy. The appeal stems from a February ruling by Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., declining to throw out the chapter 11 case of LTL Management LLC, a newly formed J&J subsidiary created to carry talc-related liabilities into chapter 11. Judge Kaplan agreed with J&J that the bankruptcy case was filed for a valid purpose, saying that chapter 11 provides cancer victims with a fairer and more efficient forum to receive compensation than the civil jury system. Injury claimants argued that J&J’s strategy isn’t permitted by the bankruptcy code and have sought to overturn Judge Kaplan’s ruling through an appeal. The ruling kept roughly 38,000 talc injury lawsuits paused in bankruptcy, aiding J&J’s efforts to settle current and future claims alleging its talc-based baby powder caused cancer, which the company denies. Despite allowing the bankruptcy case to proceed, Judge Kaplan said in March that the Third Circuit should review his decision as soon as possible. To access bankruptcy, J&J used a Texas law to fill the LTL subsidiary with talc-related liabilities and limited business operations before it filed chapter 11.

A federal appeals court ruled on Wednesday that payments individuals owe to the Internal Revenue Service for failing to obtain health insurance under the Affordable Care Act should be given priority in bankruptcy, Reuters reported. The U.S. Court of Appeals for the Third Circuit affirmed a lower court's ruling that payments owed to the IRS are entitled to be paid off before other debts in a Chapter 13 bankruptcy because they qualify as taxes. The decision came in the case of a Pennsylvania couple who filed for bankruptcy in 2019 owing $927 to the IRS for failing to obtain health insurance as required by the ACA. The individual mandate of the landmark healthcare law had required Americans to obtain health insurance or make a so-called "shared responsibility payment," but that requirement was eliminated for individuals in late 2018. Wednesday's decision was the first precedential opinion on the issue from an appeals court, but mirrors findings from a similar ruling from the Bankruptcy Appellate Panel of the 6th Circuit in March.

The largest manufacturer of opioids in the United States once cultivated a reliable stable of hundreds of doctors it could count on to write a steady stream of prescriptions for pain pills, the Washington Post reported. These doctors were among 239 medical professionals ranked by Mallinckrodt Pharmaceuticals as its top prescribers of opioids during the height of the pain pill epidemic, in 2013. That year, more than 14,000 Americans died of prescription opioid overdoses. More than a quarter of those prescribers — 65 — were later convicted of crimes related to their medical practices, had their medical licenses suspended or revoked, or paid state or federal fines after being accused of wrongdoing, according to a Washington Post analysis of previously confidential Mallinckrodt documents and emails, along with criminal and civil background checks of the doctors. Between April and September of that year, Mallinckrodt’s sales representatives contacted those 239 prescribers more than 7,000 times. The Mallinckrodt documents are part of a cache of 1.4 million records, emails, audio recordings, videotaped depositions and other materials the company turned over as part of its $1.7 billion bankruptcy settlement in 2020.

CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc. today begin a first-of-its-kind trial to determine what the pharmacy chains owe for their role in the opioid epidemic in two Ohio counties, which are seeking $878 million, Reuters reported. A federal jury decided in November that the companies helped create a public nuisance with an alleged flood of addictive pain pills that wound up on the black market, in the first trial the companies faced over the crisis. The jury did not decide how much the companies should pay to help alleviate the health crisis, which will now be determined by U.S. District Judge Dan Polster, marking the first trial to separately determine what the pharmacy chains owe after having been found liable. Ohio's Lake and Trumbull Counties want the pharmacy chains to fund a $878 million five-year plan that includes treatment for addiction and overdoses, resources for law enforcement and healthcare providers, and employment training for addicts. Walgreens, CVS and Walmart countered with an offer of a one-year program to buy back unused prescription opioid drugs in the two counties. They argue that Ohio's public nuisance law only requires them to stop the nuisance identified by the jury — an oversupply of prescription drugs — and not to address all of its negative effects. CVS, Walgreens and Walmart have denied the counties’ allegations and said they would appeal the November verdict. The companies argued that if they must do more than buy drugs back, they should not be forced to cover costs related to illegal drug use. They also said the counties have overstated the costs of their five-year plan. The U.S. opioid epidemic has caused more than 500,000 overdose deaths over two decades, according to government data. More than 3,300 opioid lawsuits have been filed nationally against drugmakers, distributors and pharmacy chains, leading to a wave of proposed settlements.

Fairport Baptist Homes, a non-profit provider of senior housing, services, and care for more than a century, is filing for bankruptcy, RochesterFirst.com reported. Officials from Fairport Baptist Homes said in a statement to News 8 WROC Monday that this plan involves stabilizing the organization’s finances while continuing to operate. “Like many nursing homes around the country, Fairport Baptist Homes has experienced significant pandemic-related financial operational challenges,” organization officials said in part in a Monday statement. According to the statement, the organization will continue to implement “operational efficiencies,” and work with Friendly Senior Living to provide guidance during the bankruptcy process. Officials say the vision for Fairport Baptist Homes, subject to approval by the bankruptcy court and the New York State Department of Health, will become a Friendly Senior Living community affiliate.

KKR & Co. Inc.’s Envision Healthcare went around some of its lenders to borrow from Centerbridge Partners LP and Angelo Gordon & Co., touching off another clash between distressed-debt investors fighting to deploy capital where opportunities are scarce, according to a WSJ Pro Bankruptcy commentary. Envision wasn’t in desperate need of cash and had until October 2023 before it would run into its next major debt hurdle, according to S&P Global Ratings. The physician-staffing business still launched a market competition to restructure roughly $7.5 billion of debt. Soon, it was talking to competing camps of distressed-debt investors, taking advantage of the intense pressure on investors to deploy capital in picked-over debt markets. Envision settled on borrowing $2.6 billion from Centerbridge, Angelo Gordon and HPS Investment Partners LLC, while handing them nearly that much in asset collateral that had previously been pledged to term lenders, people familiar with the matter said. The financing helps the company avoid a potential cash crunch, but has alienated most of its lender base. That group, including Blackstone Credit and SVPGlobal, lost access to Envision’s valuable ambulatory-service unit, AmSurg Corp., and were pushed down in the repayment order. The lenders are now weighing their legal options, saying they were blindsided by a deal that raided their collateral, according to people familiar with the matter. Blackstone and SVP declined to comment. The new loans taken out by Envision free up KKR from needing to invest more into the company, while buying it time to weather the headwinds it has faced since its 2018 buyout. The business took a hit from declining emergency room visits during the COVID-19 pandemic and from legal battles against insurer UnitedHealth Group Inc. Now Envision has $600 million less in debt after it retires $1.9 billion of a term loan at a discount. Lenders that agreed to the discounted deal include Pacific Investment Management Co., King Street Capital Management LP and Sculptor Capital Management Inc., said the people familiar with the matter. That left creditors holding the remainder of the original $5.5 billion term loan in a worse place.

The Walgreens pharmacy chain has reached a $683 million settlement with the state of Florida in a lawsuit accusing the company of improperly dispensing millions of painkillers that contributed to the opioid crisis, state officials said Thursday, the Associated Press reported. State Attorney General Ashley Moody said the deal was struck after four weeks of government evidence was presented at trial. Walgreens was the 12th and final defendant to settle with Florida, which will bring in more than $3 billion for the state to tackle opioid addiction and overdoses. “We now go into battle armed and ready to fight back hard against this manmade crisis,” Moody said at a news conference in Tampa. “I am glad that we have been able to end this monumental litigation and move past the courtroom.” Walgreens, based in Deerfield, Ill., said in a statement that the company did not admit wrongdoing in the deal, during which $620 million will be paid to the state over 18 years and a one-time sum of $63 million for attorney fees. Walgreens operates more than 9,000 stores in all 50 states, according to the company website. About 820 of those locations are in Florida.