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The Boy Scouts of America said it could drop a $650 million settlement with insurer Hartford Financial Services Group Inc. if the youth organization can’t break an impasse with sex-abuse victims opposed to the agreement, WSJ Pro Bankruptcy reported. The development described in papers filed Friday in the U.S. Bankruptcy Court in Wilmington, Del., concerns a mechanism in the Boy Scouts’ proposal for compensating thousands of men who were victimized as children. Victims groups have said they would vote down any compensation plan that includes the Hartford settlement, which they have criticized as inadequate. The Boy Scouts said if they can’t reach an accord with victims groups on the Hartford deal in coming weeks, they would seek guidance from the judge presiding over its bankruptcy on what to do with the insurance agreement at a July hearing. Absent a breakthrough, the Boy Scouts said that they would explore dropping the Hartford deal.

The judge overseeing Imerys Talc America’s bankruptcy says she needs more information about a bid to disregard 18,000 votes on the talc miner’s proposed restructuring plan that were changed after they were initially submitted, which could interfere with the company's ability to push the deal forward, Reuters reported. At a virtual hearing on Tuesday, U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware signed off on requests from insurers and a group of personal injury claimants to probe what they say are problems ranging from late-filed votes to potentially invalid votes. If votes in favor of the plan are tossed, as one group of claimants represented by Arnold & Itkin have sought, the current 80% approval of the plan among personal injury claimants could be at risk. Imerys Talc filed for bankruptcy in February 2019 in the face of around 15,000 lawsuits alleging its products caused ovarian cancer and asbestos-related mesothelioma. It is the U.S.-based unit of French group Imerys SA. In 2020, it was sold to Magris Resources Canada for $223 million. Those proceeds will go to a trust that, under the company’s proposed chapter 11 plan, will pay personal injury claims.

A group of insurers have convinced the judge overseeing Purdue Pharma LP’s bankruptcy to halt litigation over the scope of the OxyContin maker’s insurance policies so the matter can go to arbitration instead, Reuters reported. U.S. Bankruptcy Judge Robert Drain in White Plains, New York said he would stay the case during a virtual hearing on Monday. He determined that the company’s insurance coverage is not critical to its proposed reorganization that includes a settlement that resolves extensive litigation accusing it of fueling the national opioid crisis through deceptive marketing. “The insurance dispute here, while clearly important, in the context of these chapter 11 cases, is not so fundamentally important as to warrant its centralization in the court presiding over the bankruptcy cases,” Judge Drain said. The insurers include AIG Specialty Insurance Co, represented by Willkie Farr & Gallagher, and Liberty Mutual Insurance Europe SE, represented by Abrams Gorelick Friedman & Jacobson. The arbitration, which can start now, likely will not conclude until well after Purdue's bankruptcy wraps up.

The latest bankruptcy plan filed by the Boy Scouts of America increases the contributions from the BSA and its local councils to a proposed trust fund for child sex abuse victims while appearing to back away from a controversial settlement with one of the BSA’s insurers, the Associated Press reported. Under a revised plan submitted late last week, the Boy Scouts are offering to issue an $80 million unsecured promissory note to a trust fund for abuse victims. The BSA also is proposing to use restricted assets to help cover post-bankruptcy operational expenses, which would make up to $50 million in unrestricted cash available for abuse survivors. With the changes, the BSA’s proposed contribution to the trust fund would increase from about $120 million under a previous plan to as much as roughly $250 million. The BSA also said that its local councils would contribute $500 million into the fund for abuse victims, up from $425 million offered in the previous plan. The new proposal calls for the councils to contribute $300 million in cash and the remainder in property with a combined appraised value of $200 million.

After sex-abuse litigation pushed the Boy Scouts of America into bankruptcy last year, Michigan’s attorney general watched as the number of victims stepping forward climbed to 84,000, dwarfing similar allegations against the Catholic Church, the Wall Street Journal reported. In January, the Michigan State Police notified Dana Nessel’s office that 1,700 of those sex-abuse claims were in the state. Her office said it now thinks that up to 3,000 victims were abused in the state. “I certainly didn’t understand the scale of it as it pertained to Michigan,” said Ms. Nessel. “I think it’s a moral imperative that when we have this kind of information that we not sweep it under the rug.” Earlier this month, Ms. Nessel announced the first statewide criminal investigation into the Boy Scouts. It comes as the Boy Scouts near a civil settlement with lawyers representing the bulk of abuse victims as the youth group aims to end the largest bankruptcy case ever filed over childhood abuse. Ms. Nessel’s investigation is potentially damaging for the future of the Boy Scouts, which had hoped that filing for bankruptcy would ease a civil settlement with survivors and move the organization past its prior failures to protect children from predators. Instead, the chapter 11 case brought into the open roughly 84,000 claims, supplying a wealth of documentation that law enforcement never had before.

The Boy Scouts of America are nearing a settlement with lawyers for sex-abuse victims that marks a major step for the youth group’s efforts to end the largest bankruptcy case ever filed over childhood abuse, WSJ Pro Bankruptcy reported. The Boy Scouts are close to agreeing on a victim-compensation framework with a coalition of victims’ law firms that represent the bulk of the 84,000 men who stepped forward to file claims over sexual abuse in scouting programs. Details are still being hammered out, and there is no guarantee a final settlement will materialize. A deal with the law-firm coalition would mark a breakthrough for the Boy Scouts after 16 costly months under court protection. Any settlement proposal will still be subject to a vote by survivors and requires bankruptcy-court approval to take effect. The Boy Scouts filed for chapter 11 in February 2020, hoping to resolve a wave of civil litigation by victims after several states suspended statutes of limitation on sexual abuse, allowing survivors to sue regardless of how long ago the misconduct took place. The organization has said that the vast majority of abuse claims predate its modern youth protection program instituted in 1990, and that scouting is safer than ever before. It said that at least 85% of claims allege a first instance of abuse prior to that year.

The Archdiocese of St. Paul and Minneapolis announced June 17 it has fulfilled its remaining $3 million obligation to clergy abuse survivors ahead of schedule in its $210 million bankruptcy settlement, the Catholic Spirit reported. The archdiocese filed for bankruptcy protection in January 2015 in the wake of mounting claims of clergy sexual abuse dating back as far as the 1940s. Ultimately 453 claims were filed against the archdiocese during the claim-filing period, most of which were related to lawsuits brought against the archdiocese during a three-year-lifting of the statute of limitations on child sexual abuse claims in Minnesota. In May 2018, the archdiocese announced it had reached a $210 million settlement. The $3 million is the balance left on a $5 million promissory note as part of the bankruptcy settlement, in which the archdiocese agreed to contribute $1 million to the abuse survivors’ trust each year for five years.

Purdue Pharma LP’s bankruptcy judge on Wednesday approved a narrow probe of the OxyContin maker’s corporate governance despite calling part of the request that prompted it “a load of hooey,” Bloomberg News reported. U.S. Bankruptcy Judge Robert Drain approved an investigation into whether the drugmaker’s owners, members of the billionaire Sackler family, have had undue influence on an independent committee of Purdue board members. That so-called special committee reviewed potential lawsuits against the family members and is seeking a settlement instead of litigation. The appointment is the latest twist in a bankruptcy case that has aired the grievances of those affected by the opioid crisis — from states and cities to individuals. By one measure, Purdue is facing legal claims totaling more than $40 trillion, or about double the U.S. GDP in 2020. It’s trying to settle those claims by handing Purdue’s assets to a trust for the benefit of cities and states, who would use the money on opioid crisis abatement. In a contentious five-hour hearing, Judge Drain said there’s no evidence to suggest the board members’ independence has been compromised, but decided the court papers filed to request the investigation were so misleading that a probe is needed to remove any “taint” over the bankruptcy process.

The Education Department has approved another $500 million in loan-forgiveness requests from former ITT Technical Institute students who say they were swindled by the now-defunct chain of schools, as the Biden administration expands its use of debt-relief programs, the Wall Street Journal reported. The loans of 18,000 former students are being forgiven under a legal provision known as borrower defense to repayment, which allows students to have their debts erased if they prove they were defrauded by their schools. The group whose loans were addressed Wednesday said the for-profit ITT Tech provided deceptive information about their employment prospects and whether credits earned there would transfer to other schools. ITT Tech shut down in 2016, after the government banned it from enrolling new students receiving federal aid. The chain offered degrees in fields including criminal justice, computer drafting and nursing. The Education Department said it found that between 2005 and when ITT closed in 2016, the school made “repeated and significant misrepresentations” to students about their expected jobs and earnings after graduation, and lied from 2007 through much of 2014 about how other schools would view credits earned at ITT.

Imerys SA is pressing ahead in an effort to get out from under lawsuits over its U.S. mining operation, Imerys Talc America Inc., over the protests of health-care company Johnson & Johnson, WSJ Pro Bankruptcy reported. The Imerys talc-mining business, which supplied talc for Johnson’s Baby Powder, had been hit with lawsuits claiming the product caused cancer. It was placed into chapter 11 protection in 2019 and sold in 2020 for $223 million, with the proceeds earmarked for a trust to pay cancer claims. It is now trying to win court permission to seek creditor approval of its bankruptcy repayment plan. Johnson & Johnson, which has denied liability and is fighting the lawsuits, says Imerys Talc’s bankruptcy is an improper effort to immunize the mining company’s French parent, and make it easier for cancer victims to sue Johnson & Johnson. Imerys Talc is putting sale proceeds, insurance policies and funds from settlements into a trust that will pay claims for cancer. Victims won’t get much from Imerys, court papers say. Under the Imerys Talc plan, some ovarian cancer victims can expect to collect only about 5% of the value that has been assigned to their claim, for example. Johnson & Johnson says the bankruptcy plan allowed cancer victims to set the amount of their damages without opposition, setting a precedent for collecting the rest of the money from Johnson & Johnson.