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A bankrupt unit of nursing-home operator Consulate Health Care won court approval to put itself up for sale, along with the rights to try to collect on a $258 million whistleblower judgment against its other nonbankrupt corporate affiliates, WSJ Pro Bankruptcy reported. CMC II LLC, a back-office manager for Consulate-run nursing homes, filed for bankruptcy last month along with two affiliated nursing homes, saying they couldn’t pay a $258 million judgment they faced for overbilling government health programs. CMC is now seeking to sell itself out of bankruptcy, and has named a Consulate affiliate as the lead bidder after it offered $3 million. The assets up for sale include CMC’s legal rights to seek compensation from its solvent corporate affiliates over the judgment that bankrupted it. Litigation financiers have expressed interest in purchasing the legal claims, according to testimony by CMC’s top restructuring officer. Lawyers for unsecured creditors, including the whistleblower who won the judgment, Angela Ruckh, are wary of the legal claims ending up in the hands of the lead bidder. In court hearings on Thursday and Friday, they said that putting CMC in the hands of a Consulate affiliate that has not filed for bankruptcy would simply bury the judgment, which could otherwise be asserted against other Consulate units. By Friday, the only concession won by Ms. Ruckh and other unsecured creditors was a two-month delay in the sale deadline, from May to July.

Liberty Power, an electricity retailer that serves customers in about a dozen states, fired all its employees after suffering deep losses in the Texas freeze, Bloomberg News reported. The company was unable to give employees a 60-day notice because of “events which are outside our control that impacted our ability to predict future revenues to support continued operations,” President Derik Viner told staff late Sunday night in an email seen by Bloomberg News. Liberty Power is the latest power company to take a hit from the cold blast in February that left millions without power and killed more than 100 people. It follows Griddy Energy LLC, which exposed consumers to volatile power prices and quickly went out of business. The main Texas grid operator is still short almost $3 billion in payments from market participants.

Insurer Hartford Financial Services Group said on Friday that it had agreed to a settlement with the Boy Scouts of America and would pay $650 million for sexual abuse claims associated with policies issued mostly in the 1970s, Reuters reported. Under the agreement, the Boy Scouts and its local councils will release Hartford from any obligation under policies it issued, Hartford said. The Boy Scouts filed for chapter 11 protection last February, amid a flood of lawsuits over allegations of child sexual abuse stretching back decades. "Our agreement with Hartford is an encouraging step towards achieving a global resolution that will promote the Boy Scouts' efforts to equitably compensate survivors and continue the mission of scouting," the Boy Scouts said in an emailed statement. The payment will be in addition to contributions from national Boy Scouts local councils, participating chartered organizations and other participating insurers, it added. Apart from Hartford, insurer Chubb Ltd is also facing potentially massive liabilities stemming from the Boy Scouts of America bankruptcy.

A former confidant of Wayne LaPierre said that the longtime NRA leader feared the prospect of criminal charges and once described the gun group’s attorney William Brewer as “the only one” who could keep him out of prison, Bloomberg News reported. LaPierre made the comment at a meeting in early 2019, Anthony Makris said Friday at the NRA’s bankruptcy trial. Makris, a senior executive at the ad agency Ackerman McQueen, said LaPierre made the comment amid a contentious breakup between the NRA and the firm. Makris testified that he asked LaPierre at the meeting why he was turning his back on everyone who’d helped him over the years in favor of Brewer and his Dallas law firm. LaPierre responded that “Bill Brewer is the only one who can keep me out of jail,” Makris said. Makris didn’t specify why LaPierre feared jail, but The Wall Street Journal reported in October that the Internal Revenue Service is investigating the former NRA leader for possible criminal tax fraud related to his personal expenses. “We are not aware of any criminal justice inquiry, period,” Kent Correll, counsel to Wayne LaPierre, said in a statement.

Federal regulators have imposed a $15 million fine against the former owner of a mid-Michigan dam that unleashed a 500-year flood last year, saying that the company failed to perform important safety work after the disaster, MLive.com reported. The Federal Energy Regulatory Commission (FERC) announced on April 15, that it would assess the penalty against Boyce Hydro, a bankrupt company co-owned by Lee Mueller of Nevada that formerly operated the Edenville Dam. The Gladwin County dam failed last May, causing a downstream failure of the Sanford Dam and subsequent flooding in the village of Sanford, city of Midland and beyond. The fine has been anticipated since FERC proposed it in December. It equals the largest civil penalty for a hydroelectric dam safety failure in the United States, assessed after the 2005 Taum Sauk reservoir collapse in Missouri, which also resulted in a $15 million fine. The fine is based largely on Boyce Hydro’s failure to act on federal orders after the May 19, 2020 dam collapse in Edenville, which caused more than $200 million in estimated damages and forced the temporary evacuation of about 10,000 people. However, attorneys say it’s unlikely the fine can be paid because Boyce Hydro is insolvent and bankruptcy claims by creditors such as Byline Bank and other flood victims are taking priority over payment to the federal government. Boyce Hydro no longer owns the dam, which was transferred to the Four Lakes Task Force (FLTF). The task force paid $1.5 million to acquire the Edenville, Sanford, Secord and Smallwood dams through eminent domain as a delegate of Midland and Gladwin counties.

The crippling winter freeze that sent gas and power prices skyrocketing across Texas in February is providing a warning to cities about the risks of global warming: The cost of some extreme weather events can stick around for years, Bloomberg News reported. The municipal-bond market generally shrugs off natural disasters because they are usually offset by an influx of federal aid. But the electricity meltdown in the Lone Star state has left cities and local utilities on the hook for massive power bills. Bay City, a small community of less than 20,000 people, says its tab for that one week dwarfs what it spends in an entire year. Denton’s utility spent $200 million over four days buying power. San Antonio’s utility plans to sell long-term bonds to spread out the $1 billion in charges it incurred. While municipal-bond holders have been paying more attention to climate change in recent years, the Texas freeze is the latest in a series of disasters that have forced investors to rethink the way they evaluate bond portfolios that hold securities that don’t mature for decades.

Nearly four years after an infamous festival that was billed as an ultraluxurious musical getaway in the Bahamas left attendees scrounging for makeshift shelter on a dark beach, a court has decided how much the nightmare was worth: approximately $7,220 apiece, the New York Times reported. The $2 million class-action settlement, reached Tuesday in U.S. Bankruptcy Court in the Southern District of New York between organizers and 277 ticket holders from the 2017 event, is still subject to final approval, and the amount could ultimately be lower depending on the outcome of Fyre’s bankruptcy case with other creditors. But Ben Meiselas, a partner at Geragos & Geragos and the lead lawyer representing the ticket holders, said on Thursday that he was happy a resolution had at last been reached. “Billy went to jail, ticket holders can get some money back, and some very entertaining documentaries were made,” Meiselas said in an email mentioning Billy McFarland, the event’s mastermind. “Now that’s justice.” Lawyers representing the trustee charged with Fyre’s assets did not immediately respond to a request for comment. McFarland and the festival’s co-founder, the rapper Ja Rule, have faced more than a dozen lawsuits against their company, Fyre Media, in the event’s aftermath. The plaintiffs have sought millions and alleged fraud, breach of contract and more. McFarland is serving a six-year prison sentence after pleading guilty to wire fraud charges. In 2018, a court ordered him to pay $5 million to two North Carolina residents who spent about $13,000 apiece on VIP packages for the Fyre Festival.

Two months after blackouts paralyzed Texas, most of the people who participate in the state’s 19-year-old electricity market, including producers, sellers and traders, share a similar view: The freeze wasn’t a one-off event; the state’s power market needs to change, according to a Wall Street Journal analysis. Two months after blackouts paralyzed Texas, most of the people who participate in the state’s 19-year-old electricity market, including producers, sellers and traders, share a similar view. The freeze wasn’t a one-off event. The state’s power market needs to change. In a single week in February, when a cold front caused wind farms, natural-gas plants and a nuclear plant to freeze, electricity sales in Texas topped $46 billion — more than five times what the state spent on electricity in all of 2020. That exposed a major flaw in a laissez-faire power market that had not required participants to winterize their equipment. Despite the astronomical prices, few of the major players who are supposed to make the Texas market work made money during the freeze. The promise of such a windfall was designed to be an incentive for producers to be ready to operate when electricity supplies are scarce. Unhappy power-plant owners, retail power providers and even some traders are now threatening to reduce investment in the nation’s second most-populous state until a market many liken to a casino is stabilized. The biggest losers of all were Texas residents, roughly two-thirds of whom lost power. Millions were left in the dark for days, with some resorting to burning furniture in their homes to stay warm.

Bernie Madoff died yesterday in a prison medical center in North Carolina. For many of the victims of Mr. Madoff’s Ponzi scheme and lawyers still pursuing his ill-gotten assets, the fallout continues to affect their lives, WSJ Pro Bankruptcy reported. More than a decade has passed since Mr. Madoff confessed to his crimes and began serving a 150-year sentence. In time, a court-appointed trustee learned the scheme had taken an estimated $17.5 billion of client money, of which more than $14 billion has been recouped and distributed to account holders at Mr. Madoff’s now-defunct investment firm. The trustee is pursuing more banks, offshore funds, family offices and other investors for allegedly taking stolen cash, in litigation expected to wind through courts for years. As those efforts play out, the financial lives of numerous individuals and nonprofit organizations who turned to Mr. Madoff to safeguard their money remain ruined.

Two months after the storm crippled large swaths of Texas, insurers are sketching out a legal strategy to pin the costs on utilities and power companies that they say failed to adequately prepare for bitterly cold weather, the New York Times reported. At stake could be more than $10 billion in insured losses for insurers and their business partners, as well as almost-certain premium increases for property owners if the insurers have to pay for the damage themselves. The insurers say the power companies and utilities failed to prepare for a major winter storm, even though past cold snaps and climate-change data had made the danger clear. In 1989 and 2011, wintry weather caused so much damage that state and federal regulators spent months investigating the causes and issued detailed recommendations for hardening the electrical system against storms. “It doesn’t look like anybody did anything,” said Lawrence T. Bowman, a lawyer in Dallas who represents insurers in liability disputes. But decades of deregulation have made the state’s power grid a dizzying web of companies that could make determining fault tricky. Insurers will also have to show that the damage was the result of “gross negligence.” And there are dozens of small companies in the supply chain — some of which have gone bankrupt since the storm — that interact with one another in myriad ways.