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In 2012, former baseball player Curt Schilling abruptly shut down his video game company 38 Studios without giving about 400 employees their final paychecks. Nine years later, many of those people are finally seeing some money — although it’s just a fraction of what they were owed, Bloomberg News reported. Many of the staff who worked for the volatile game developer in either its Rhode Island or Maryland offices will receive payment of about 14% or 20%, respectively, of what the company owed them before it ran out of money and was forced to shut down on May 24, 2012, according to bankruptcy documents. After nearly a decade of litigation through a Delaware court, final payouts were decided in June and recently began being distributed to staff. One former 38 Studios employee told Bloomberg News they received their check this week. Other employees said their checks had been sent to old addresses, as many of them have moved multiple times for new jobs in the years since 38 Studios closed. Schilling founded 38 Studios in the twilight of his baseball career in order to make his dream game, an online role-playing game that would take on the popular World of Warcraft. But his inexperience and mismanagement led the studio to collapse before the game was finished. In 2011, 38 Studios moved from Massachusetts to Rhode Island as part of an elaborate deal in which the state government served as a guarantor for a $75 million loan that was meant to support several years of development. But 38 Studios only received about $50 million and spent lavishly, leading Schilling’s company to run out of money in just one year.

Former Purdue Pharma LP director Mortimer D.A. Sackler testified Thursday he was “shocked and disappointed” when he learned last year the drugmaker his family owns pleaded guilty to federal felonies over its marketing and sale of the opioid OxyContin, saying management assured the board it was complying with relevant laws, WSJ Pro Bankruptcy reported. Sackler said during the second week of a trial in Purdue’s bankruptcy case that before he left the drugmaker’s board in late 2018, briefings by management indicated the company was successfully curbing OxyContin abuse while getting the painkiller to patients with legitimate medical needs. The board got updates on a reformulated, abuse-deterring version of OxyContin as well as an internal program to identify doctors who were overprescribing the drug, Sackler said. He added that management repeatedly told the board that, “Purdue was going above and beyond. We were doing things that no other company had ever done in terms of trying to do that. Trying to reduce prescription opioid abuse.” Purdue filed for chapter 11 bankruptcy protection in September 2019 following an onslaught of lawsuits over OxyContin, the company’s flagship painkiller. The trial is scrutinizing a settlement that would shield Sackler family members from civil litigation accusing them of contributing to the opioid crisis in exchange for a roughly $4.5 billion contribution from them to fund opioid abatement programs. Purdue pleaded guilty last year to three federal felonies over its conduct stretching from 2007, when the company and three of its executives pleaded guilty earlier to federal charges of misleading the public about OxyContin’s addiction risk, to 2017.

The judge overseeing the Boy Scouts of America’s bankruptcy case said the youth group can press ahead with a proposed settlement of sex-abuse claims, while requiring that certain provisions be removed, WSJ Pro Bankruptcy reported. Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., indicated she would approve a restructuring agreement between the Boy Scouts and lawyers representing abuse survivors, rejecting arguments from insurance companies that it wasn’t the outcome of a fair negotiation. The restructuring deal is a cornerstone of a broader plan to end the Boy Scouts bankruptcy case, the largest ever filed over sexual abuse. Later this month, the Boy Scouts are expected to seek approval of chapter 11 plan disclosures that would give creditors enough information to vote yes or no. The bankruptcy plan also requires approval from Judge Silverstein, who said Thursday she wasn’t determining whether it would pass legal muster. But Judge Silverstein said that she wouldn’t approve certain aspects of the restructuring agreement, such as nullifying an earlier $650 million settlement between the Boy Scouts and insurer Hartford Financial Services Group Inc. The youth group’s obligations, if any, to Hartford must be decided separately, she said. Nor will she let the Boy Scouts cover millions of dollars in legal fees for lawyers that negotiated in the bankruptcy on behalf of abuse victims, she said. It is up to the Boy Scouts and the abuse survivors whether to file a chapter 11 plan consistent with her ruling, she said. The restructuring agreement is designed to lock in support for the bankruptcy plan from the bulk of the 82,500 men who stepped forward to seek compensation after the youth group filed for bankruptcy last year.

Former Purdue Pharma LP president Richard Sackler distanced himself from a program pitched years ago by consulting giant McKinsey & Co. to increase OxyContin sales and denied that his family or the company are responsible for the opioid epidemic, WSJ Pro Bankruptcy reported. Dr. Sackler said that although he remembered having a call with McKinsey about research it had done for the drugmaker, he said during testimony on Wednesday in Purdue’s bankruptcy trial he didn’t recall some details about certain marketing and sale programs including an initiative called “Evolve to Excellence” that federal authorities have alleged led healthcare providers to write medically-unnecessary prescriptions of OxyContin, an opioid painkiller. McKinsey agreed earlier this year to a $573 million settlement with state authorities over advice it gave Purdue and other drugmakers on opioid painkillers, without admitting wrongdoing. Dr. Sackler’s testimony about the E2E program came during the second week of a bankruptcy trial scrutinizing a proposed settlement of litigation against he and other members of Purdue’s controlling family alleging they bear responsibility for fueling the opioid crisis. If approved, the agreement would shield the Sacklers from civil lawsuits over OxyContin in exchange for roughly $4.5 billion from family members to fund opioid abatement programs. The family would also cede control of Purdue under the proposal, which is being challenged by a handful of state and federal authorities.

U.S. states are racing to meet a deadline to commit to a $26 billion opioid settlement with three drug distributors and the drugmaker Johnson & Johnson, as some grapple with local resistance and concerns the amount isn't big enough to address the damage done by an epidemic of addiction, Reuters reported. Fourteen state attorneys general unveiled the proposed settlement with McKesson Corp., AmerisourceBergen Corp., Cardinal Health Inc. and J&J on July 21, kicking off a months-long process for states, counties and cities to sign on. By Saturday, states must decide whether to join settlements that call for the distributors to pay $21 billion and J&J to pay $5 billion, money meant to help fund treatment and other services. The epidemic of opioid abuse has resulted in nearly 500,000 overdose deaths since 1999, according to the U.S. government. The settlement's complex formula envisions at least 44 states participating, but ultimately the companies decide whether a "critical mass" have joined and whether to finalize the deal. North Carolina Attorney General Josh Stein, a lead negotiator, last month said he expected "well north" of 40 states to join. But several are against it, including Washington and New Mexico and communities in West Virginia holding out in hopes of recouping more. Michigan, South Carolina and Nevada say they are still evaluating the deal. Ohio, which was slated to take the distributors to trial next month, is nearing a separate, related $808 million deal with them. In hard-hit New Hampshire, Associate Attorney General James Boffetti said he recently told a judge the state was unlikely to join the deal with J&J, which the state plans to take to trial next year. "That settlement is small in comparison to the harm that they caused in New Hampshire and other places," he said. "It's just not sufficient." The settlement aims to resolve more than 3,000 lawsuits accusing the distributors of ignoring red flags that pain pills were being diverted into communities for illicit uses and that J&J played down the risks of opioid addiction. The companies deny wrongdoing, saying that the drugs were approved by the U.S. Food and Drug Administration and that responsibility for ballooning painkiller sales lies with others, including doctors and regulators. The participation of states is tied closely to that of their local governments, who brought the majority of lawsuits. Ultimately, $10.7 billion is tied to the extent localities participate.

California regulators are threatening to escalate enforcement action against utility giant PG&E Corp. for safety lapses at the same time as a federal judge is probing the company’s role in starting the second biggest-wildfire in the state’s history, Bloomberg News reported. California Public Utilities Commission President Marybel Batjer said she’s asking the agency’s staff to investigate whether PG&E should be placed into a higher level of oversight for a pattern of self-reported missed inspections and other safety incidents, according to a letter sent Wednesday to PG&E Chief Executive Officer Patricia Poppe. The notice came shortly after the judge overseeing PG&E’s criminal probation pressed the company for more details about how it initially responded to the Dixie Fire, which has burned about 650,000 acres and destroyed more 1,200 structures in the Sierra Nevada mountains north of Sacramento. PG&E has said that its power line may have started the fire, which has been raging for more than a month.

Members of the family that owns OxyContin maker Purdue Pharma won’t contribute billions of dollars to a legal settlement unless they get off the hook for all current and future lawsuits over the company’s activities, one of them told a court Tuesday in a rare public appearance, the Associated Press reported. David Sackler, grandson of one of the brothers who nearly 70 years ago bought the company that later became Purdue, testified at a hearing in federal bankruptcy court in White Plains, New York, that without those protections, “I believe we would litigate the claims to their final outcomes.” “We need a release that’s sufficient to get our goals accomplished,” Sackler said in response to questions from a lawyer for the U.S. bankruptcy trustee. “If the release fails to do that, we will not support it.” That’s the heart of argument over the settlement plans of the family and the company, based in Stamford, Conn. Two offices of the U.S. Justice Department, nine states and the District of Columbia are objecting to the company’s settlement plan largely because it would grant legal protection to members of the wealthy Sackler family even though none of them are declaring bankruptcy themselves.

The National Rifle Association hasn’t cleaned up rampant financial and managerial misconduct as it claimed over the past year, illustrating the need for the gun-rights group to be dissolved, New York Attorney General Letitia James said in a court filing, Bloomberg News reported. A failed bid for bankruptcy protection earlier this year exposed the hollowness of the organization’s claim to have corrected the mismanagement, which included lavish spending by its longtime leader Wayne LaPierre and other serious lapses, James said in an amended lawsuit in New York state court. The attorney general said even the bankruptcy judge had cited the “shocking” level of authority LaPierre exercised over the group. James, who sued to dissolve the New York-chartered nonprofit a year ago, said in her new complaint Monday that the NRA’s “evasion of accountability” has “continued unabated.” She said the organization’s leaders intentionally disregarded proper corporate governance, wasted charitable assets, falsely reported improper transactions, and allowed insiders to take advantage of the NRA. Several alleged abuses were highlighted during a bankruptcy trial in Texas federal court, where a judge in May rejected the NRA’s attempt to reorganize as not having been filed in good faith. The court wrote that the NRA’s bankruptcy was part of an inappropriate attempt to avoid James’s lawsuit. The judge also said he was concerned about the “surreptitious manner” in which LaPierre excluded NRA board members and executives from his decision to file for bankruptcy.

A year and a half after the Boy Scouts of America sought bankruptcy protection amid an onslaught of child sex abuse lawsuits, a Delaware judge is poised to issue a ruling that could determine whether the organization might emerge from bankruptcy later this year, the Associated Press reported. Following a three-day hearing that ended Monday, the judge is mulling whether the Boy Scouts can pursue an $850 million agreement with attorneys representing a majority of the 82,500 abuse claimants in the case. Failure to win approval of the agreement could throw the case into chaos. The agreement involves the national Boy Scouts organization, the roughly 250 local Boy Scout councils, the official victims committee, and law firms representing some 70,000 men who say they were molested as youngsters by Scoutmasters and others. The Texas-based Boy Scouts have proposed contributing up to $250 million in cash and property to a fund for abuse victims. Local councils, which run day-to-day operations for Boy Scout troops, would contribute $600 million. The national organization and councils also would transfer their rights to Boy Scout insurance policies to the victims fund. In return, they would be released from further liability for abuse claims. The agreement is opposed by insurers that issued policies to the Boy Scouts and local councils, other law firms representing thousands of abuse victims, and various church denominations that have sponsored Boy Scouts troops.