Members of the Sackler family who own Purdue Pharma LP are nearing an agreement to boost their more than $4 billion offer to resolve sprawling opioid litigation after negotiating with states that had objected to terms of the OxyContin maker's bankruptcy reorganization, according to a court filing, Reuters reported. Sackler family members and states objecting to terms of Purdue's bankruptcy reorganization are "close to an agreement in principle" to contribute additional cash beyond the $4.325 billion they had pledged to settle opioid litigation, according to a mediator's interim report filed yesterday. The mediation kicked off in January among Sackler family members and several states after a U.S. district judge overturned the original settlement, which was the cornerstone of Purdue's bankruptcy reorganization plan.
Cottage Hospital closed at least temporarily Jan. 8 after losing inclusion in the Medicare and Medicare payment program, the Galesburg (Ill.) Register-Mail reported. All of the hospital staff jobs have been terminated. The Cottage clinic remains open, but CEO Sanjay Sharma has filed chapter 11 bankruptcy. A public forum on Jan. 27 covered three general topics: the financial challenges faced by health workers and patients, the mental health challenges currently faced by members of the Galesburg community and the disruption of services and health records. Mike Pearman, a representative from The Workforce Office of Western Illinois, provided information on federal and state benefits that former Cottage employees may qualify for through the Workforce Innovation & Opportunity Act.
A group of bankruptcy law professors are looking to weigh in on Johnson & Johnson’s use of the bankruptcy system to settle lawsuits alleging that its talc products cause cancer, calling the strategy a "serious abuse," Reuters reported. The group filed court papers on Tuesday seeking approval to submit a “friend of the court” brief in support of an effort by a committee representing people who have sued over J&J's talc products to get the bankruptcy of J&J subsidiary LTL Management LLC thrown out. The seven professors argued that the pharmaceutical giant should not be permitted to use bankruptcy to rid itself of its talc-related liabilities when it’s in strong financial health. The filing comes a few weeks before U.S. Bankruptcy Judge Michael Kaplan in New Jersey is set to hear arguments over the committee’s motion to dismiss the case. LTL's bankruptcy was filed in October to resolve around 38,000 claims alleging J&J’s talc-based products caused mesothelioma and ovarian cancer. J&J, which maintains that its talc products are safe, created LTL to offload talc-related liabilities and then placed it into bankruptcy with the goal of settling those claims instead of litigating them individually in various courts. The professors, including Jared Ellias of the University of California Hastings School of Law and Kenneth Ayotte of University of California Berkeley School of Law, accused J&J of attempting to “deprive innocent talc victims of their day in court.” While this is not the first time a company has used bankruptcy to handle tort liabilities, it is an "alarming" trend, the professors said. A spokesperson for LTL said in a statement on Wednesday that courts have recognized that resolving these types of claims through Chapter 11 is legitimate use of the restructuring process. The spokesperson also stated that while LTL does not believe the claims are valid, it expects them to grow in number.
Rhode Island has reached a settlement of more than $114 million with an opioid manufacturer and three distributors, most of which will go directly to fighting the crisis and helping people with addiction, state Attorney General Peter Neronha said yesterday, the Associated Press reported. The settlement includes $21.1 million from Johnson & Johnson and an additional $90.8 million in total from AmerisourceBergen, Cardinal Health and McKesson, he said at a news conference. The money is an addition to a $2.6 million settlement reached with McKinsey & Co. last year. “All of these companies basically prioritized profits over safety,” Neronha said. The agreement “will both expedite the flow of resources to communities impacted by the crisis while enabling the company to focus on ensuring the pharmaceutical supply chain is meeting the needs of health care providers and patients across the nation,” AmerisourceBergen said in a statement.
Business leaders who were scrambling to survey employees on their vaccination status and line up scarce testing resources breathed a sigh of relief after the Supreme Court overturned the Biden administration’s vaccine-or-test mandate for large private employers, the Wall Street Journal reported. The relief was short-lived. The surging Omicron variant has renewed the debate over how long the coronavirus pandemic will adversely affect companies in a range of industries. As news of the Jan. 13 Supreme Court ruling receded, businesses turned to grapple with a new set of challenges around how to keep their employees safe and productive. The Supreme Court ruling has given way to a new reality: Without a consistent set of rules on COVID-19, businesses will now have to fend for themselves, navigating an increasingly complex and often contradictory patchwork of federal, state and local regulations and guidelines on vaccines, testing and other safety measures. U.S. companies have reacted in disparate ways to the Supreme Court ruling. Some companies and business associations have expressed disappointment over the ruling, while others say they prefer having flexibility to tailor their approach to their workforces.
The U.S. hospital-staffing shortage exacerbated by the latest COVID-19 wave is showing signs of easing, but many West Coast and rural states are still seeing the worst of it, Bloomberg News reported. Over the past seven days, about 16.7% of U.S. hospitals have reported critical staffing shortages, down from a recent peak of 18.7% on Jan. 9, according to data from the Department of Health and Human Services. Fewer facilities are reporting shortages in populous New York, Florida and Illinois. The numbers are still concerning to state leaders, but are at least returning to the levels seen in October and November, before the omicron spike. The omicron variant hit the U.S. in December with a surge in infections that dwarfed all previous waves. Now, the recent decline in cases in many areas has helped ease strain at a time when pandemic burnout, the winter holidays and even conflicts over vaccine mandates have made it hard to staff U.S. hospitals. The average omicron infection has proved to be less severe and deadly than previous variants, thanks to inoculations and the variant itself, but it has produced so many cases that hospitalizations jumped anyway. Many health-care workers caught COVID-19 in their communities and had to miss work.
Johnson & Johnson won’t have to fight against two separate committees of victims who say they were harmed by the company’s baby-powder after a bankruptcy judge threw out one of the panels, Bloomberg News reported. Bankruptcy Judge Michael B. Kaplan ruled that the federal bankruptcy watchdog must abide by a court order issued last year that set up a single official committee to represent more than 38,000 people who claim J&J’s baby powder gave them cancer. Kaplan then threw out a December decision by the watchdog, known as the U.S. Trustee, to reorganize that committee and add a second panel. J&J has long denied that the talc in its baby powder and other products cause cancer. The ruling is a victory for J&J and the unit it created to resolve billions of dollars worth of baby-powder lawsuits the consumer products giant faces. J&J put that unit, LTL Management, into bankruptcy to seek court permission to establish a $2 billion trust fund to address all current and future suits. Lawyers for the U.S. Trustee argued that under bankruptcy code, no court has the power to second guess its decision to set up a committee to represent creditors like the people suing J&J. The two panels represented people who have the two main types of cancer allegedly caused by talc in baby powder.
Eagle Senior Living, a nonprofit operator of 15 facilities in seven states, has filed for bankruptcy to restructure its roughly $235 million in municipal bond debt, the latest continuing-care community to seek protection from creditors during a pandemic that has increased labor costs, WSJ Pro Bankruptcy reported. The Ann Arbor, Mich.-based business filed for chapter 11 protection on Friday in the U.S. Bankruptcy Court in Wilmington, Del., with plans to reduce its debt by $40 million and transfer and possibly sell certain facilities to new operators. Eagle Senior said that it was having financial trouble before the pandemic but is the latest senior-care business to come under increasing financial pressure due to the COVID-19 pandemic, unable to make debt service payments. Occupancy rates have declined to roughly 81% from more than 90% before the pandemic, Todd Topliff, president of parent American Eagle Delaware Holding Co., said in a sworn declaration. Meanwhile, staffing costs have risen because of outbreak-related hazard payments and overtime, sign-on bonuses and wage increases to make up for “unprecedented” labor shortages across Eagle Senior’s facilities, he said. The business said it had to turn to staffing agencies to supplement its workforce, and continues to combat labor shortages it attributed to vaccine mandates and competition from other industries for workers. Costs also piled up for personal protective equipment, as well as food containers so meals could be personally delivered to residents’ rooms instead of eating in a dining room, Mr. Topliff said in court papers. Supply shortages of various products also added to costs. The business has been operating under several forbearance agreements. The business operates in Colorado, Minnesota, Wisconsin, Ohio, Alabama, Tennessee and Florida and has a total of 1,000 residents. It has 362 independent living apartments, 641 assisted living units, and 192 memory care units. COVID-19’s rapid spread through eldercare facilities, along with the pandemic’s lockdowns, have deterred many older Americans from moving into senior communities. Nearly 8% of the $41 billion in outstanding senior-living bonds are in default as of December, according to Municipal Market Analytics, the most since tracking began in 2009. The sector now accounts for almost one-quarter of defaulted debt in the muni market, not including bonds caught up in Puerto Rico’s bankruptcy.
The ill CEO of bankrupt nursing home chain QHC Facilities LLC is recovering, but the judge overseeing the proceedings said she still has “grave concerns” about the case, foremost making sure patients are protected, Bloomberg News reported. “There was chaos before this case was even filed and it’s continued now post-petition,” U.S. Bankruptcy Judge Anita Shodeen said during a Thursday hearing. The U.S. Trustee moved to appoint a chapter 11 trustee this week after Chief Executive Officer Nancy Voyna was hospitalized “with extremely serious health conditions,” according to a Tuesday court filing. QHC filed for bankruptcy Dec. 29 with a plan to seek a buyer, citing “crippling staffing and employee retention issues” and the death of Voyna’s husband and co-founder in June as factors. Jeffrey Goetz, a lawyer for the company, said a courtesy call to the U.S. Trustee about the situation on Sunday led to “assertions that the sky was falling, the ship was rudderless” and the company needed immediate help.
The Cottage Hospital CEO Sanjay Sharma says that he will appeal the decision Dec. 27 that cut off Medicare payments so that the hospital can be reopened, the Galesburg (Ill.) Register-Mail reported. Cottage Hospital locked its doors Saturday night and put up signs saying that it is temporarily closed. Letters were sent on Friday to employees telling them their jobs were terminated. Centers for Medicare & Medicaid Services informed Cottage Hospital Dec. 27, 2021, that it failed to meet health and safety standards to be certified as a Medicare and Medicaid provider. The deadline for Medicare and Medicaid coverage was then extended to Jan. 14, with current patients being covered for 30 days beyond that. Without Medicare and Medicaid, the hospital would lose most of its revenue. Medicare and Medicaid payments accounted for 72% of Cottage Hospital’s net revenue in 2020, according to the latest Health Facilities and Services Review Board data profile. Cottage hospital has 60 days from Dec. 29 to file an appeal with Centers for Medicare & Medicaid Services and request a hearing. That would make the deadline Feb. 27.
