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Bankruptcy Judge Robert Drain in White Plains, N.Y., has extended temporary protections against opioid-related litigation for the Sackler family members who own Purdue Pharma until Feb. 1 after another judge overturned the OxyContin maker’s bankruptcy settlement this month, Reuters reported. Judge Drain extended the litigation shield yesterday, giving Purdue and the Sacklers time to discuss a path forward. The judge in September had approved Purdue’s reorganization plan and underlying settlement that aimed to resolve widespread litigation accusing the company and the Sacklers of fueling the U.S. opioid epidemic through deceptive marketing. The settlement included protections for the Sacklers against future opioid-related lawsuits in exchange for a $4.5 billion contribution to the plan, which would steer money toward opioid abatement efforts. The protections, known as nondebtor releases, prompted appeals from several states and the U.S. Department of Justice’s bankruptcy watchdog. U.S. District Judge Colleen McMahon reversed Drain’s approval of the deal on Dec. 16, finding the bankruptcy court did not have authority to grant the releases. Purdue, which plans to appeal that decision, then asked Judge Drain to extend temporary protections for the Sacklers that have been in place for two years. The current protections were set to expire on Thursday, meaning lawsuits on hold could have resumed absent an extension. Judge Drain approved Purdue’s request over objections from two states that argued that negotiations would be more effective without the shield. He also warned that if the parties, including the Sacklers, did not negotiate in good faith over the next month on an amended deal, there would be “consequences.”

For years, millions of Americans with medical emergencies could receive another nasty surprise: a bill from a doctor they did not choose and who did not accept their insurance. A law that goes into effect Saturday will make many such bills illegal, the New York Times reported. The change is the result of bipartisan legislation passed during the Trump administration and fine-tuned by the Biden administration. It is a major new consumer protection, covering nearly all emergency medical services, and most routine care. Even with insurance, emergency medical care can still be expensive, and patients with high deductible plans could still face large medical bills. But the law will eliminate the risk that an out-of-network doctor or hospital will send an extra bill. Currently, those bills add up to billions in costs for consumers each year. Behind the scenes, medical providers are still fighting with regulators over how they will be paid when they provide out-of-network care. But those disputes will not interfere with the law’s key consumer protections. If you are having a medical emergency and go to an urgent care center or emergency room, you can’t be charged more than the cost-sharing you are accustomed to for in-network services. This is where the law’s protections are the simplest and the most clear for people with health insurance. You will still be responsible for things like a deductible or a co-payment. But once patients make that normal payment, they should expect no more bills.

A lawyer for claimants suing Johnson & Johnson over its baby powder wants a bankruptcy judge to force the pharma giant to produce requested information, saying it’s hindering efforts to investigate the case, Bloomberg News reported. “There has been what appears to be a concerted effort to obstruct, limit and delay discovery,” in the case, Michael S. Winograd, co-counsel to two official claimants’ committees, wrote in a Dec. 28 letter. A Dec. 23 response from J&J saying it wouldn’t fulfill the requests “has necessitated a forthcoming motion to compel,” wrote Winograd, a partner at Brown Rudnick. J&J spun its talc liabilities into a separate unit, LTL Management LLC, and put the unit into bankruptcy Oct. 14, adding to the complexity of the case and sparking controversy because it’s a profitable company. It’s facing 38,000 lawsuits charging that its talc products caused cancer and has pushed to create a trust to pay victims. Winograd said the original claimant committee emailed information requests to J&J counsel on Dec. 16. After “radio silence for four days,” J&J said it wouldn’t accept requests about future claims for LTL.

OxyContin maker Purdue Pharma LP spent years building a restructuring plan to settle thousands of lawsuits and deliver funding to combat the opioid crisis. That plan is in limbo after a federal judge ruled that a deal the company struck with its owners isn’t allowed under the law, WSJ Pro Bankruptcy reported. After U.S. District Judge Colleen McMahon’s ruling last week overturning a roughly $4.5 billion settlement between the OxyContin maker and members of the Sackler family who own the company, Purdue, once on the verge of settling an onslaught of lawsuits over its flagship opioid painkiller, will remain in bankruptcy court as it attempts to salvage a settlement that took years and hundreds of millions of dollars to craft. Billions of dollars that Purdue and the family had agreed to pay are now on hold, jeopardizing payouts expected by the people injured by OxyContin overuse and for programs to combat the worsening opioid epidemic. The company so far has spent more than $548 million in fees for lawyers, and other professionals advising the company and creditor groups, according to court papers filed earlier this month. Purdue said in papers filed on Monday in the U.S. Bankruptcy Court in White Plains, N.Y., that although Judge McMahon’s ruling is a “significant setback,” the company believes it has a good chance to win on an appeal.

The U.S. health-care profession is suffering its own Great Resignation, pushing more hospitals into financial distress just as a winter surge of the coronavirus hits, Bloomberg News reported. Across the country, hospitals are buckling under the strain of nursing shortfalls and the spiraling cost of hiring replacements. For Watsonville Community Hospital on California’s Central Coast, those costs became too much to bear, and contributed to the facility’s bankruptcy this month. The shortages are most acute at hospitals like Watsonville that rely on government funding to treat poorer patients, since they have fewer resources to compete against the rising cost of keeping staff. The situation adds to the stress facilities have already experienced responding to the early onset of the virus, just as the last of federal aid is being doled out. The issue is emerging in the capital markets, too. Aveanna Healthcare Holdings Inc. went public in April in an effort to expand beyond its leading position in pediatric home health services. But a shortage of caregivers has pummeled its stock, while credit raters gave a debt issue to fund acquisitions low-tier junk level assessments. Insurers are trying to move patients out of hospitals more quickly due to the staffing shortages and have offered the home-care company premiums to do so, according to an emailed statement from Executive Chairman Rod Windley. The pain spreads beyond nurses. A report by human-resources firm Mercer this year estimated a shortfall of 3.2 million lower-wage workers, such as nursing assistants and home health aides, by 2026. Employers will also need to hire more than 1.1 million registered nurses in that period, Mercer said. Walsh said his hospital is also struggling to fill lab, respiratory therapist and administrative positions.

Non-consensual releases of creditors’ direct claims against a debtor are not permitted by the Bankruptcy Code, according to District Judge Colleen McMahon of Manhattan, who vacated the bankruptcy court’s confirmation of the controversial Purdue Pharma LP chapter 11 plan, according to today's Rochelle's Daily Wire column. Had the reorganization plan been upheld (or if it is upheld after appeal to the Second Circuit), the controlling Sackler family’s $4.325 billion contribution to the reorganization plan would have absolved them from all liability stemming from the opioid crisis, even if creditors with direct claims did not consent. Judge McMahon’s 142-page decision on December 16 is perhaps the most outstanding and remarkable bankruptcy opinion of the decade. Unless reversed on appeal, she will have barred debtors from confirming chapter 11 plans in the Second Circuit with non-consensual releases of creditors’ direct claims against non-debtor third parties. Contrary to what may have been reported in the press, Judge McMahon did not prohibit all non-debtor releases, nor did she bar members of the Sackler family from obtaining releases from perhaps the majority of opioid claims. Judge McMahon’s opinion is narrow. She only barred non-consensual releases where creditors have direct claims against the Sacklers that are not derivative of claims that the company has against family members.

Companies knew to expect pandemic surprises heading into winter, and they keep coming to fruition, the Wall Street Journal reported. The Biden administration’s vaccine mandate is in limbo. The threat of the Omicron variant is still being studied. International travel is getting more restrictive again. The muddled picture is causing a broad reassessment across the corporate sphere. Some companies are rethinking vaccine policies and pushing off return-to-office plans, while others are working to maintain existing timelines to bring people together. The varied responses reflect the difficulties many companies face in sizing up the state of the pandemic now and its trajectory in the months ahead, more than a dozen executives said. Meanwhile, the longer that delays persist, the more some employees get set in their at-home routines and gain conviction they can do their jobs from anywhere, for the long term. In recent days, companies as varied as Facebook parent Meta Platforms Inc., Ford Motor Co. and Alphabet Inc.’s Google have delayed return-to-office dates or given employees the option to stay home longer. Ride-hailing company Lyft Inc. told its corporate employees last week they wouldn’t be required back in its offices until 2023. Read more. (Subscription required.) 

In related news, some of the largest U.S. hospital systems have dropped COVID-19 vaccine mandates for staff after a federal judge temporarily halted a Biden administration mandate that healthcare workers get the shots, the Wall Street Journal reported. Hospital operators including HCA Healthcare Inc. and Tenet Healthcare Corp. as well as nonprofits AdventHealth and the Cleveland Clinic are dropping the mandates. Labor costs in the industry have soared, and hospitals struggled to retain enough nurses, technicians and even janitors to handle higher hospitalizations in recent months as the Delta variant raged. Vaccine mandates have been a factor constraining the supply of healthcare workers, according to hospital executives, public-health authorities and nursing groups. Many hospitals already struggled to find workers, including nurses, before the pandemic. The shortages were compounded by burnout among many medical workers and the lure of high pay rates offered to nurses who travel to hot spots on short-term contracts. Read more. (Subscription required.) 

Jones Day LLP’s help in creating Johnson & Johnson’s talc liability spinoff should disqualify the firm from serving as the unit’s lead bankruptcy counsel, the Justice Department and thousands of talc injury claimants said, Bloomberg Law reported. Jones Day “appears to be the architect” of J&J’s October corporate restructuring, the U.S. Trustee’s office said in a court filing on Wednesday. The move, known colloquially as the Texas Two-Step, allowed the manufacturing giant to isolate its exposure to more than 35,000 baby powder injury lawsuits and address those claims in chapter 11. By assisting J&J through the divisional merger and bankruptcy filing, Jones Day appears to lack the independence to be a fiduciary for the debtor, the U.S. Trustee told the U.S. Bankruptcy Court for the District of New Jersey. A law firm representing thousands of talc injury claimants also filed an objection Wednesday to Jones Day’s application to represent J&J unit LTL Management LLC. LTL Management filed for chapter 11 in October, seeking to use special federal rules that allow bankrupt companies to set up a trust fund to pay all current and future asbestos claims. The J&J unit faces consumer claims that its baby powder caused asbestos-related health problems, including ovarian cancer. It has proposed paying all alleged victims through a trust funded with at least $2 billion. The case was moved from North Carolina to New Jersey last month after a bankruptcy judge determined that the company lacked ties to the former state. A committee of talc injury claimants has called for a total dismissal of the bankruptcy.