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As the two-year mark in the Roman Catholic Diocese of Rochester’s (N.Y.) bankruptcy draws nigh, a $35 million settlement proposed between the diocese and a handful of its insurers is not sitting well with the bankruptcy’s official creditors’ committee, the Rochester Beacon reported. How the court comes down on the proposed Rochester diocese settlement could set the tone, not just for the Rochester case, but also for chapter 11 bankruptcies of three other New York Catholic dioceses that asked for court protection months after the Rochester diocese’s September 2019 filing. “I believe that the settlement of $35 million is within the range of reasonableness and should be approved by the Court,” wrote diocese special insurance counsel James Murray in a June 24 brief supporting the proposal. “We hope for the Court’s approval and we pray this settlement will be a catalyst for fruitful dialogue and progress in negotiations among the remaining concerned parties in the case,” the diocese said in a June 11 statement announcing the deal. The settlement between diocese and a dozen insurance companies that had balked at paying any claims came after nearly two years of stalled talks in a court-arranged mediation between the diocese and the companies. Not so fast, says creditors’ committee counsel Ilan Scharf, however. If the settlement is approved as proposed, it will either give abuse survivors short shrift or push the diocese into dire financial straits. Four hundred and eighty-five such survivors have filed claims in the case. Not yet clear is what sort of financial compensation each might win. What kind of claims the diocese proposes to pay will be largely determined by how much dozens of insurance companies that wrote liability coverage for the diocese decades ago contribute.

A Sacramento, Calif.-based medical equipment manufacturer has filed for bankruptcy as it faces an $8.1 million legal judgment in a dispute over a device to treat diabetes, the Sacramento Business Journal reported. Bionica Inc. markets an insulin infusion pump that can be carried by patients in their pockets to regularly deliver insulin and can “rescue people who previously have had no chance for a normal life,” the company states on its website. Bionica operates out of a space in McClellan Park, and was incorporated in 2010, according to its filings with the California Secretary of State’s office. Bionica’s founder Gregory Gilbert and its sister company, Trina Health LLC, have been accused of false advertising of Bionica's diabetes products, in a lawsuit that the inventor of the company’s products, Dr. Thomas Aoki, filed in 2011. Amid the long legal battle, Bionica filed for chapter 11 bankruptcy in May. In its filing, the company stated that its assets were between $50,001 and $100,000 and that it faced between $1 million and $10 million in liabilities. Most of those liabilities are connected to an $8.1 million judgment that was handed down by a federal judge late last year, Gilbert told the Business Journal. In the judgment handed down in November 2020, U.S. District Judge Troy Nunley found Gilbert liable for patent infringement and falsely advertising diabetes treatments that were invented by Aoki.

A sex-abuse compensation program unveiled by the Boy Scouts of America would pay victims based not only on the severity of abuse they endured but also where it happened, taking into account the states where victims have had the opportunity to sue abusers regardless of when their abuse occurred, WSJ Pro Bankruptcy reported. The proposal outlines a range of possible payments, from $3,500 for sexual abuse that involved no touching, to as much as $2.7 million for sexual penetration by an adult perpetrator and other aggravating circumstances, according to court papers filed Thursday in the U.S. Bankruptcy Court in Wilmington, Del. The longer the abuse went on and the more severe it was, the higher the payments under the Boy Scouts’ settlement plan. Other criteria that will determine payouts includes whether an abuser has been accused by multiple victims, or was named in confidential internal files the Boy Scouts kept on suspected abuse, according to court records. Victims whose claim would have a better chance of succeeding outside of bankruptcy will get more than those on weaker legal ground. The compensation proposal is the culmination of negotiations between the Boy Scouts and representatives for most of the roughly 84,000 men who have filed claims against the youth group over childhood abuse. The settlement program requires the approval of the bankruptcy judge overseeing the Boy Scouts’ chapter 11 case and could undergo changes in coming weeks. The $850 million offer by the Boy Scouts represents the largest settlement of childhood sexual abuse claims in U.S. history, said Ken Rothweiler, a lawyer whose firm represents 16,000 claimants. The Boy Scouts also have proposed signing over their insurance rights and those of hundreds of affiliated local councils for the benefit of victims. The proposal, however, doesn’t have support from insurance carriers that are potentially on the hook for victim claims under policies they sold the Boy Scouts decades ago, when most of the alleged abuse occurred. Insurers have criticized the proposal, saying the youth group “turned over the pen” to victims’ lawyers to set the terms under which abuse claims will be valued and paid.

The Archdiocese of Santa Fe, N.M., announced in a community letter that the effort to auction 732 properties for a bankruptcy settlement has been delayed, the Santa Fe New Mexican reported. The Rev. Glennon Jones, vicar general of the archdiocese, said this week in the letter that the auction company doesn’t have a final list of properties because surveyors’ work continues, property titles still need to be acquired or analyzed, and opening prices haven’t been set. Jones suggested that the postponement reflected no setback and the auction would simply be rescheduled. About 385 victims of sexual abuse by archdiocese clergy members have sued, prompting the Archdiocese of Santa Fe to declare bankruptcy three years ago. The archdiocese now seeks to raise money to settle the case, but the amount hasn’t been determined, an attorney for victims said. Numerous Catholic dioceses across the country have filed for bankruptcy because of abuse by priests. Brad Hall, an Albuquerque attorney who represents a number of victims, said the survivors themselves would vote on whether an amount is appropriate. No such vote is imminent.

Some of the world’s largest oil companies have been ordered to pay part of a $7.2 billion tab to retire hundreds of aging wells in the Gulf of Mexico that they used to own, capping a case that legal experts say is a harbinger of future battles over cleanup costs, the Wall Street Journal reported. A federal judge ruled last month that Fieldwood Energy LLC, a privately held company that currently controls the old wells and had sought bankruptcy protection, could pass on hundreds of millions of dollars in environmental liabilities to prior owners and insurers of the wells as part of its reorganization plan. Exxon Mobil Corp., BP, Hess Corp., Royal Dutch Shell and insurance companies had objected to the plan. The dispute, litigated for months in federal bankruptcy court in Houston, centered over who should bear the enormous costs of capping and abandoning wells, primarily in the shallow waters of the Gulf of Mexico, where an oil spill could wreak havoc. The companies could still appeal the ruling. The exact future costs of the cleanup are still unclear, but lawyers for BP estimated that its liability could top $300 million, while lawyers for Exxon said its exposure could total as much as $373 million. A group of insurers said they could be on the hook for more than $1 billion. For offshore wells—unlike most onshore wells—the Department of the Interior can hold previous operators liable for the cleanup if the current operator is unable to cover the expenses, to avoid taxpayers incurring the costs.

A landmark trial targeting multiple opioid manufacturers and distributors opened yesterday with lawyers for the government accusing the companies of bringing death and destruction to communities, the Associated Press reported. The case bought by Suffolk and Nassau counties and New York Attorney General Letitia James is part of a slew of litigation over an epidemic linked to nearly 500,000 deaths over the last two decades. But this case is unique in targeting the entire opioid supply chain and for being tried in front of a jury, instead of a judge. The case is being heard in a Long Island law school auditorium to accommodate the multiple defendants and their lawyers. Jayne Conroy, the lawyer for Suffolk County, said in her opening statement that she would try to show how drug makers and distributors had operated in a “parallel universe” from those experiencing the ravages of opioid addiction. Purdue Pharma was initially named in the case, as were some individual members of the Sackler family, before the company filed for bankruptcy. Cases against Purdue, Mallinckrodt, and Rochester Drug Cooperative are all now moving separately through U.S. Bankruptcy Court, according to James’ office. Defendants in the suit included Endo Health Solutions and its affiliates; Teva Pharmaceuticals USA, Inc. and its affiliates; Allergan Finance, LLC and its affiliates McKesson Corporation, Cardinal Health Inc. and Amerisource Bergen Drug Corporation, according the attorney general’s office. Defendants say the claims are overly broad and their culpability cannot be proven, according to court documents. James announced Saturday that one defendant, Johnson & Johnson, agreed in an 11th-hour settlement to pay the state up to $230 million to stop manufacturing or distributing opioids.

Brazos Electric Power Cooperative is seeking an additional four months to maintain control of its bankruptcy case, saying that recently enacted laws aimed at mitigating the financial fallout of February’s winter storm in Texas have complicated its restructuring efforts, Reuters reported. In court papers filed on Monday, the co-op asked U.S. Bankruptcy Judge David Jones

New York Attorney General Letitia James has urged a state court to toss the National Rifle Association's claims that her attempts to disband the gun rights group are unconstitutional, Reuters reported. James on Thursday evening filed a motion to dismiss the NRA’s counterclaims in litigation she brought last summer accusing the organization of financial misconduct, including diverting millions of dollars in charitable funds for the personal benefit of NRA executives and associates. Her lawsuit, proceeding in Manhattan state court, aims to dissolve the organization or, in the alternative, remove its leadership. The NRA responded with counterclaims accusing James of violating its right to free speech and “weaponizing” her powers to pursue a “blatant and malicious retaliation campaign” against the group because she is politically opposed to its mission. The NRA also attempted to protect itself through a chapter 11 bankruptcy in Texas, but the judge overseeing that case threw it out in May, finding that it was not filed in good faith.

Johnson & Johnson said on Saturday that it will pay $263 million to resolve claims it fueled an opioid epidemic in New York state and two of its largest counties, Reuters reported. The settlements remove the drugmaker from a jury trial scheduled to begin on Tuesday on Long Island, where several big opioid makers and distributors are also defendants. Johnson & Johnson did not admit liability or wrongdoing in settling with New York state, and with Nassau and Suffolk counties. The $229.9 million state settlement also calls for J&J to stop selling the painkillers nationwide. J&J said that the settlements were consistent with its prior agreement to pay $5 billion to settle opioid claims by states, cities, counties and tribal governments nationwide.

A government lawyer has selected the head of Squire Patton Boggs’ global restructuring practice to investigate the independence of a special committee that struck a deal with the Sackler family members who own the OxyContin maker Purdue Pharma LP, Reuters reported. The U.S. Department of Justice’s bankruptcy watchdog, the U.S. Trustee, selected Squire’s Stephen Lerner for the role, according to court papers filed yesterday. The appointment comes a week after U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., said that he would allow an examiner to explore whether the special committee of Purdue’s board was influenced at all by the Sackler family members in reaching a settlement that protects them against opioid-related litigation. The judge said during a contentious court hearing on June 16 that he did not know of any evidence to suggest the deal was negotiated unfairly but would bring in an examiner anyway out of fear of misleading press reports. U.S. Trustee William Harrington said in yesterday’s court filing that in selecting Lerner for the role, he consulted with lawyers for Purdue and its official committee of unsecured creditors, as well as supporters and opponents of the settlement.