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A bankruptcy judge cleared the Diocese of Rockville Centre, N.Y., to hire Arthur J. Gonzalez as a special mediator to help resolve claims by sex-abuse victims over real estate and other assets that have been sold or transferred to other parts of the institution, WSJ Pro Bankruptcy reported. At a hearing yesterday in the U.S. Bankruptcy Court in New York, Judge Shelley Chapman signed off on a compromise between the Roman Catholic diocese and a panel of abuse survivors that allows for the hiring of Mr. Gonzalez, a former bankruptcy judge, to help resolve disputes over past asset transfers. The Office of the U.S. Trustee, a government watchdog overseeing the bankruptcy system, objected to Gonzalez serving in that position, saying he can’t take an unbiased role in any fight between the diocese and abuse victims, since he was one of three advisers hired by the diocese before it filed for bankruptcy to look into the asset transfers in question. Rockville Centre filed for bankruptcy in October, becoming the largest diocese to seek chapter 11 protection in response to lawsuits by victims of sexual abuse.

The Archdiocese of Santa Fe, N.M., intends to hire a land use planning consultant to help it shed dozens of properties as part of its bankruptcy case, the Santa Fe New Mexican reported. Consultants with James W. Siebert & Associates, a Santa Fe land planning firm, would be among numerous experts the archdiocese has hired — attorneys, real estate brokers and accountants — drawing accusations from critics of wasteful spending that ultimately will affect payouts to hundreds of victims of sexual abuse by members of the clergy. An attorney with the Roman Catholic institution said, however, the experts are needed and that bankruptcy court is the most efficient place for settlements between victims and dioceses. Court records show the archdiocese has asked U.S. Bankruptcy Judge David T. Thuma for approval to hire the Siebert firm. The records say that Siebert can help the archdiocese comply with subdivision statutes and regulations. A court document said the Siebert company would charge $180 an hour if a principal of the firm worked on the case, $120 an hour if an associate worked on it, $95 an hour for a computer-aided designer and $45 an hour each for research and clerical work. An attorney for the archdiocese, Ford Elsaesser, said that real estate issues can involve broken lot lines or lots created long ago. Elsaesser, who is based in Idaho, said he didn’t want to contract properties for sale and then learn a step was missed in the process. “So that’s the reason why they’re being engaged,” Elsaesser said of Siebert. An auctioneer hired by the archdiocese recently began trying to sell 732 properties around Northern New Mexico.

Certain Boy Scouts of America insurers, as well as groups representing former Scouts who say they were sexually abused by Scouting leaders, are challenging the youth organization’s efforts to push through a reorganization plan by the end of the summer, Reuters reported. Despite being on opposite sides of the Boy Scouts’ bankruptcy – with the insurers potentially on the hook for covering sex abuse claims that span decades – Century Indemnity Co. and the official group representing survivors both filed objections to the Boy Scouts’ disclosure materials and related bankruptcy matters on Wednesday. The Boy Scouts, represented by White & Case, filed for bankruptcy in February to address nearly 300 lawsuits accusing leaders of sexual abuse. The objections come about a week ahead of a hearing in which U.S. Bankruptcy Judge Laurie Selber Silverstein will determine whether the Boy Scouts can begin soliciting creditor votes for its proposed reorganization plan. Century, represented by O’Melveny & Myers, argues that the organization has “effectively forfeited” defending itself against potentially fraudulent sex abuse claims.

Brazos Electric Power Cooperative Inc. is seeking bankruptcy court approval of a $350 million loan as it restructures in the aftermath of February’s historic winter storm that wiped out power for millions in Texas, Reuters reported. The cooperative, represented by Norton Rose Fulbright, filed a motion to access the loan on Tuesday. A hearing is set for May 18 before Chief U.S. Bankruptcy Judge David Jones in Houston to approve its use of up to $150 million of the loan on an interim basis. The judge will take up the full amount of the loan at a later date. Brazos, which is the oldest and largest electric power co-op in Texas, filed for bankruptcy protection in March in the face of a disputed $2.1 billion bill from the state's grid operator, the Electric Reliability Council of Texas (ERCOT), following the severe cold snap in February. The co-op said that it was in "fantastic financial health" before the storm caused wholesale electricity rates to soar. The loan, provided by a J.P. Morgan Chase Bank-led group of lenders, will fund collateral requirements Brazos must meet with ERCOT. The loan will also fund the co-op's purchases of gas and power on spot and day-ahead markets and provide working capital, according to court papers.

Utility giant PG&E Corp. rejected criminal liability for its role in a 2019 wildfire that burned 78,000 acres in Northern California, arguing that a local prosecutor is twisting state law in an attempt to find the company culpable, Bloomberg News reported. Sonoma County District Attorney Jill Ravitch last month charged PG&E with with 33 counts stemming from the Kincade Fire. In a state court filing Tuesday, the utility said it has accepted regulators’ conclusions that the fire was caused by PG&E’s equipment but will contest the 25 counts that have never been applied to a wildfire. PG&E said in a statement that its thoughts are with those who lost homes and businesses in the fire, and especially injured firefighters. The filing outlines “why we believe the majority of these charges should be dismissed.” While California health and safety codes make it a crime to emit air contaminants, those laws govern pollution-generating industries such as oil refineries, factories and dumps, PG&E said in the filing. They don’t apply to companies that may cause a wildfire and, as a byproduct, “cause contaminants to be emitted into the air from the property of third parties.” PG&E, which was driven into bankruptcy in 2019 due to wildfires caused by its equipment, is attempting to avoid being convicted of felonies a third time. It pleaded guilty last year to 84 counts of involuntary manslaughter for the deadliest fire in state history in 2018, and has been on probation since its 2016 conviction for safety violations stemming from a fatal gas-pipeline explosion in San Bruno in 2010. The district attorney in Shasta County is reviewing last year’s Zogg Fire, which killed four people, for possible criminal charges against the utility.

A Dallas judge has thrown the National Rifle Association out of bankruptcy court, calling into question the gun-rights group’s plan to reincorporate in Texas as it faces allegations of spending abuses and mismanagement in New York, WSJ Pro Bankruptcy reported. Judge Harlin Hale of the U.S. Bankruptcy Court in Dallas dismissed the NRA’s chapter 11 case, ruling that NRA CEO Wayne LaPierre filed the January bankruptcy “to gain an unfair litigation advantage” and “to avoid a state regulatory scheme.” Yesterday’s ruling follows arguments by New York Attorney General Letitia James and the NRA’s former ad agency Ackerman McQueen Inc. that the bankruptcy was filed in bad faith and didn’t have a valid purpose. James sued to dissolve the NRA in August, accusing LaPierre and other executives of corruption and financial mismanagement, which LaPierre and the NRA have denied. The New York lawsuit has continued while the NRA has been in chapter 11. James has oversight of the NRA, which has its headquarters in Virginia but was founded in New York in 1871 and is officially domiciled there. James said in a press conference after Tuesday’s ruling that her office continues to pursue its enforcement action against the NRA and that the group can’t reorganize in Texas without approval of the New York state attorney general. In his ruling, Judge Hale said, “The NRA is a solvent and growing organization using this bankruptcy as a tool to win its dissolution lawsuit, and that is not an appropriate use of bankruptcy.”

One lawyer negotiating a resolution to the multi-billion-dollar bankruptcy filed by the Boy Scouts of America billed $267,435 in a single month, the New York Times reported. Another charged $1,725 for each hour of work. New lawyers fresh out of law school have been billing at an hourly rate of more than $600. The high-stakes bankruptcy case has drawn in lawyers by the dozens, negotiating how to compensate tens of thousands of people who have filed claims of sexual abuse. Lawyers and other professionals — both those representing the Boy Scouts and some who are representing victims — have submitted fee applications with the court that have now surpassed $100 million. By August, they could reach $150 million. The hefty fees being charged to the Boy Scouts’ estate, which is money taken off the top of what could be offered to victims, have become a rising point of contention. U.S. Bankruptcy Judge Laurie Selber Silverstein, who is overseeing the case, has called the totals “staggering.” In a filing last week, one of the insurance companies that will be responsible for paying victims, Century Indemnity Company, asked the judge to hold back a portion of the legal fees until they can be more thoroughly reviewed.

Almost $400 million of fees and expenses have been racked up by professionals working the bankruptcy of Stamford, Conn.-based Purdue Pharma LP, Bloomberg News reported. The bills add up to more than half the amount that all individuals harmed by OxyContin would share under the drugmaker’s proposed settlement of personal injury claims. Purdue’s financial woes have turned into a cash machine for the lawyers and consultants hired by the company and its creditors who are sorting through claims that the drugmaker fanned the flames of the U.S. opioid crisis. “These are huge — this is a large chunk of money that would otherwise be going to pay victims of a horrible tort,” said Prof. Bob Lawless University of Illinois School of Law. “You have to pay the undertaker. Whether they have to be paid that much is another question.” Purdue is unusual because its biggest creditors aren’t vendors or landlords, but cities and states reeling from the opioid epidemic, as well as the people who lost everything, including their loved ones, to opioid drugs. Purdue Pharma is paying market rates for professionals in the case, the company said in an emailed statement, noting that it’s responsible for the fees of multiple creditor groups.

More than a year into the Boy Scouts of America’s bankruptcy proceedings, frustration is at a boiling point for sex abuse survivors who say the nonprofit organization is doing little to put forth meaningful reparations for their trauma, USA Today reported. Their anger has extended to the bankruptcy court itself, which is redacting hundreds of letters sent to Judge Laurie Selber Silverstein, preventing the public from understanding the full extent of the abuse they say they suffered as children. The Torts Claimants Committee, the official body chosen to represent abuse survivors in the case, filed an objection yesterday to the Scouts’ latest bankruptcy reorganization plan, saying that it "minimizes the organization’s history of failing to protect children from sexual predators." Central to the objection is what the committee calls a small sum that the Boy Scouts has offered to put toward a trust for survivors as well as a lack of "the most basic information necessary" for survivors to ensure they are getting a fair deal. That includes financial details of local Scout councils and sponsoring organizations, some of which attorneys maintain are as liable as the national organization for the abuse. The two camps differ wildly on estimated costs of the abuse. The Boy Scouts said in its latest plan that its claims expert estimates the cost of settling the claims at between $2.4 billion and $7.1 billion. The claimants' committee says it will be more than $100 billion.

Former talc miner Cyprus Mines Corp may depose two candidates proposed by insurers to represent the interests of people who may bring future talc-related claims in the company’s bankruptcy, a judge overseeing the case ruled yesterday, Reuters reported. During a virtual status conference, U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Del., signed off on the request by Cyprus, which is being represented by Reed Smith, to conduct brief depositions of the two insurer-backed candidates for the role of future claims representative (FCR) in its chapter 11 case. Her ruling comes a few weeks ahead of a June 2 hearing in which she'll be asked to choose between three people for the role. Cyprus filed for bankruptcy in February as part of a settlement with another bankrupt talc company, Imerys Talc America Inc., that had acquired some of its talc-related assets in 1992. Cyprus is one of the companies that has been sued in recent years by plaintiffs alleging a link between exposure to talc products and certain types of cancer and asbestos-related diseases. While the company already faces hundreds of lawsuits making talc-related personal injury claims, it is seeking the appointment of an FCR to represent those who may have claims but may not be aware of them right now. FCRs are a regular presence in mass tort-related bankruptcies.