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Toronto-Dominion Bank defeated a lawsuit that sought nearly $4.3 billion in damages over allegations the institution ignored red flags about R. Allen Stanford’s financial empire before it was exposed as one of the largest-ever Ponzi schemes, WSJ Pro Bankruptcy reported. A judge in Ontario on Tuesday dismissed legal claims brought by court-appointed liquidators of Stanford International Bank Ltd., a former TD Bank customer, following a trial that examined an 18-year business relationship that unraveled when U.S. authorities exposed Mr. Stanford’s fraud in 2009. Liquidators appointed in Antigua, where SIB was located, have been pursuing TD and other banks that did business with Mr. Stanford in an attempt to recover money for creditors. Justice Barbara Conway of the Ontario Superior Court of Justice ruled TD Bank employees had no reason to believe at the time that Mr. Stanford was committing fraud or there was anything amiss at SIB. Liquidators argued there were warnings before 2009 that should have tipped off TD Bank, saying it should be liable for between $1.1 billion and $4.28 billion in damages, according to the ruling. But Justice Conway said Mr. Stanford and other SIB directors “went to great lengths to present SIB as a responsible, upstanding bank,” noting it hired experienced bankers and accountants, kept nice offices and presented professional annual reports. The SIB liquidators said they were disappointed with Justice Conway’s ruling, “which leaves many thousands of creditors around the world without justice, more than a dozen years after the collapse of Allen Stanford’s massive Ponzi scheme.” The liquidators are evaluating SIB’s position and considering an appeal, they said.

The National Rifle Association is dropping its federal lawsuit accusing New York Attorney General Letitia James of wrongfully trying to dissolve it, saying that it would focus instead on making the same claims in state court, Bloomberg News reported. The gun rights group, which argues that James’s investigation of it is politically motivated, filed a notice of voluntary dismissal on Friday in federal court in Albany, N.Y. In a statement, it said that it would continue to make the claims in state court in Manhattan, where the attorney general last year sued the NRA over allegations of fraud. The move is important “because it will ensure that the NRA’s claims against NYAG James will be tried in the same court and by the same jury that will hear her lawsuit seeking to dissolve the NRA,” the organization said. New York’s suit in state court survived the NRA’s motion to dismiss it in January, when a judge rejected the group’s argument that its federal suit was filed first and therefore trumped the state case. The judge also denied the NRA’s request to transfer the attorney general’s case to federal court. The NRA recently saw its bankruptcy filing rejected by a Texas judge, leaving the group vulnerable to James’s efforts.

After more than a year of high-stakes negotiations with billions of dollars on the line, a bankruptcy plan for Purdue Pharma, the maker of OxyContin, cleared a major hurdle late Wednesday, NPR reported. Bankruptcy Judge Robert Drain in White Plains, N.Y., moved the controversial deal forward despite objections from dozens of state attorneys general, setting the stage for a final vote by the company's creditors expected this summer. The drugmaker filed for chapter 11 protection in 2019 facing an avalanche of lawsuits tied to its aggressive opioid sales practices. Public health experts and many government officials say the introduction of OxyContin fueled the nation's deadly opioid epidemic. This development brings members of the Sackler family, some of whom own Purdue Pharma and served on the company's board of directors, a step closer to winning immunity from future opioid lawsuits. According to legal documents filed as part of the case, that immunity would extend to dozens of family members, more than 160 financial trusts, and at least 170 companies, consultants and other entities associated with the Sacklers.

U.S. District Court Chief Judge Frances Tydingco-Gatewood reduced the professional fees approved for the Archdiocese of Agana's accounting firm and special immigration counsel in the church's bankruptcy case, for not complying with court orders and laws that require all bankruptcy-related billings and payments to be submitted to the court for approval, the Guam Daily Post reported. Davis & Davis PC and Deloitte & Touche LLP requested and received direct payment from the archdiocese, despite the court's issuance of "several orders dealing with the proper procedure to seek compensation," the judge said. Assistant U.S. Trustee Curtis Ching noticed the direct payments and asked the court to reduce the compensation to these firms because of violations of court orders, the Bankruptcy Code and the Bankruptcy Rules of Procedure. "These requirements are intended to protect against the 'unfairness of allowing the debtor to deplete the estate by pursuing its interests to the detriment of the creditors'," the judge wrote in her order. The creditors in the archdiocese's chapter 11 bankruptcy case include mostly clergy sex abuse claimants, who have yet to receive any compensation from the archdiocese. 

Boy Scouts of America, which filed for bankruptcy protection a year ago to guard against a flood of sexual-abuse lawsuits, now faces a new problem in Michigan: potential criminal charges, the Detroit Free Press reported. The state police and attorney general announced Tuesday the two law enforcement groups have launched a joint investigation targeting accusations of sex abuse in the Boy Scouts and are asking for tips that may lead to prosecutions. In the announcement, Michigan Attorney General Dana Nessel said that the investigation was prompted by "allegations that came to light during recent civil litigation." But Nessel did not say whether they were looking for just past incidents or those that might be ongoing. She was unspecific about how large the team was, other than to say it "will include prosecutors, special agents and victim advocates," and she did not say why she was pursing the investigation now. In the past few years, the public has heightened sensitivity to sex abuse, especially after the sex abuse scandal surrounding former USA Gymnastics team doctor and MSU professor Larry Nassar.

Bankruptcy Judge Robert D. Drain in New York indicated yesterday that he would permit Purdue Pharma’s proposal to remake itself as a nonprofit company to be put to a vote by thousands of plaintiffs, who have sued to compel the maker of OxyContin to help pay for the terrible costs of the opioid epidemic, the New York Times reported. The restructuring plan is at the centerpiece of an intensely negotiated blueprint for a collective settlement with more than 600,000 claimants who contend that for two decades the company falsely and aggressively marketed its prescription opioid OxyContin as a nonaddictive painkiller, and as a result contributed to hundreds of thousands of opioid-related overdoses and deaths. Besides protecting the company from further legal action over opioids, the plan includes a blanket release from civil lawsuits for Purdue’s owners, members of the billionaire Sackler family. The issue of the Sacklers’ liability has been perhaps the most contentious in the proceedings, ever since Purdue filed for bankruptcy protection in 2019, seeking a shield against rapidly accruing lawsuits. The individual Sacklers, members of one of the wealthiest families in the U.S., did not seek bankruptcy protection, but they argue that they should be covered by the same release from all present and future lawsuits that their company would be given if the plan is confirmed. In return, the Sacklers have agreed to relinquish ownership of Purdue and contribute $4.5 billion to the settlement, including $225 million to the federal government. The money would be paid in installments over nine or 10 years, most of it going to a national opioid abatement trust fund, which would then be disbursed to states and municipalities to support addiction prevention and treatment programs. Judge Drain said that the plan provisionally cleared the legal hurdles of sufficiency, and that he was waiting for a handful of issues to be resolved before the plan is distributed. Purdue is expected to mail out information packets next week that describe the reorganization plan to the roughly 614,000 claimants in the bankruptcy case, with voting to conclude by July 14.

Texas lawmakers are poised to pass several measures designed to help pay for the billions of dollars of energy costs stemming from catastrophic blackouts during the severe winter storm that hit the state this year, Bloomberg News reported. The Texas House of Representatives approved a bill on Tuesday that would allow electric co-operatives including bankrupt Brazos Electric Power Cooperative to cover unpaid power expenses from the disaster by selling debt that can be paid back over 30 years through charges on customer bills, a process known as securitization. The measure, which needs final Senate approval before heading to the Governor’s desk, would offer financial relief to electric co-ops that make up the bulk of the nearly $3 billion in payments owed to the Electric Reliability Council of Texas, the state’s main grid operator. Brazos filed for bankruptcy in March, citing about $2 billion in debts to Ercot.

California regulators said PG&E Corp. should pay a $20 million fine for flaws in the way it carried out intentional power cuts in 2019 to prevent live wires from sparking wildfires, Bloomberg News reported. PG&E’s total penalty was $106 million, but that amount will be offset by $86 million in bill credits that were already provided to customers at the direction of Governor Gavin Newsom, according to a statement yesterday by the California Public Utilities Commission. The $20 million will be paid by PG&E shareholders in the form of customer bill credits and a contribution to a backup battery program, according to a decision by an administrative law judge with the commission. The judge said the penalty was due to violations that included the failure of PG&E’s website during the intentional blackouts, the inaccuracy of PG&E’s outage maps and the failure of PG&E to notify 50,000 customers of the impending power cuts. The order will become final unless a party to the case files an appeal or a commissioner requests a review of it. PG&E said that it was reviewing the judge’s order and will evaluate whether to appeal it. The company said it has taken a number of actions to correct the issues that occurred. PG&E started resorting to deliberate blackouts after its equipment caused some of the worst wildfires in California history, forcing the company into bankruptcy in 2019. The utility emerged from chapter 11 last July after having paid $25.5 billion to resolve fire claims.