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In anticipation of the significant legal damage that could be inflicted by at least 93 pending child abuse lawsuits filed in the past three years, the California Franciscan Friars — an order to which the Old Mission Santa Barbara (Calif.) belongs — is now giving serious thought to chapter 11 bankruptcy, the Santa Barbara Independent reported. “We have been overwhelmed by the number of cases filed, both in terms of the human cost and in our ability to fairly compensate all the abuse survivors,” explained Provincial Minister Fr. David Gaa. “The reality is, litigation costs and the potential liability will exceed our limited financial resources.” Under the bankruptcy process, Gaa noted, all the claims will be evaluated in the same action, and litigants will not find themselves in a race with one another for compensation and damages. The bankruptcy process, Gaa added, tends to move more swiftly; survivors will be settled with sooner. Bankruptcy judges, Gaa added, can pressure insurance companies to honor policies they wrote, thus generating greater revenues from which survivors can be compensated. Attorney Tim Hale, who represents plaintiffs in eight of the 93 cases, countered that under the bankruptcy scenario, survivors will be effectively denied their day in court, where they can confront their abusers under oath. They will also be denied, he said, the opportunity to confront high-ranking Franciscan administrators and demand why they covered up the predations of frontline priests. Several of California’s most prominent archbishops — in San Francisco, Oakland and San Diego, for example — have already declared bankruptcy. They all cited the flood of cases that would never have been filed had the state legislature not extended the statute of limitations in child sex abuse cases by three years in 2019.

A federal jury on Tuesday found the National Association of Realtors and large residential brokerages liable for about $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high, the Wall Street Journal reported. The verdict could lead to industrywide upheaval by changing decades-old rules that have helped lock in commission rates even as home prices have skyrocketed — which has allowed real-estate agents to collect ever-larger sums. It comes in the first of two antitrust lawsuits arguing that unlawful industry practices have left consumers unable to lower their costs even though internet-era innovations have allowed many buyers to find homes themselves online. Announced in a packed Kansas City, Mo., courtroom, the verdict came after just a few hours of jury deliberations. The case was brought by home sellers in several Midwestern states. Their lawyers hugged and shook hands as the verdict was announced. Under antitrust rules, the presiding judge could triple the damages verdict, which would total more than $5 billion. The plaintiffs also have asked the judge to order changes to how the industry operates.

The New York judge overseeing Celsius Network LLC’s bankruptcy urged the U.S. Securities and Exchange Commission to move quickly in deciding if it will authorize the failed crypto lender’s plan to transform itself through chapter 11 into a publicly-traded Bitcoin mining firm, Bloomberg News reported. Judge Martin Glenn told an SEC lawyer during a Monday court hearing he hopes the regulator will go through its own decision-making process expeditiously because Celsius and its creditors have moved through chapter 11 relatively quickly. “The SEC will make whatever decision it believes is the correct one,” Judge Glenn said. “I just hope the process will move forward, so if there are any bumps in the road we can try and work those out along the way.” Judge Glenn is considering whether to approve Celsius’s plan to partially repay customers whose accounts have been frozen since June 2022, weeks before the company filed bankruptcy. Celsius’s bankruptcy plan proposes repaying customers through a combination of crypto currency and stock in a new publicly traded Bitcoin mining company guided by a new management team led by Arrington Capital. Celsius and creditors would still need clearance from the SEC if its proposal to transform the company into a new business is approved by Judge Glenn, according to court documents. The crypto firm could liquidate if its plan to exit chapter 11 as a crypto miner fails. Celsius’s repayment proposal, though widely supported by creditors, is being challenged by some of its customers. Customers who spoke Monday against the restructuring plan said they’d prefer liquidation because they’d receive more Bitcoin and Ethereum as opposed to stock in a new, unproven venture.

FTX founder Sam Bankman-Fried testified on Monday that the collapse of the cryptocurrency exchange was precipitated by the head of his Alameda Research trading firm failing to adequately hedge against a downturn in the market, Reuters reported. Testifying in his defense for a second day, the 31-year-old former billionaire said that he asked Caroline Ellison — chief executive of Alameda Research and his former romantic partner — to make trades that would offset the risk of falling cryptocurrency prices starting in mid-2022. Answering questions from his defense lawyer, Mark Cohen, Bankman-Fried said Ellison became emotional when he discussed the risk of Alameda — which had lent funds to FTX executives and invested in startup companies — going bankrupt. "She started crying," he said. "She agreed that Alameda should have hedged, she also said that maybe it shouldn't have made some of the venture investments." Ellison is one of three of Bankman-Fried's former close confidantes who pleaded guilty and testified for the prosecution. Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy. Prosecutors have said he looted billions of dollars in FTX customer funds to prop up Alameda, make speculative venture investments, and contribute to U.S. political campaigns. If convicted, he could face decades in prison.

FTX founder Sam Bankman-Fried told a jury Friday that he didn’t commit fraud and didn’t take customer funds, beginning his defense against criminal charges that he stole billions from his cryptocurrency exchange and spent the money on investments, political donations, and real estate, YahooFinance.com reported. He did, however, say that he "made a number of small mistakes and a number of big mistakes." His biggest mistake, he said, was not having a chief risk officer. "A lot of people got hurt," he said. His highly anticipated testimony began Friday morning with questions from his attorney Mark Cohen that attempted to address the heart of the government’s case against his client. Prosecutors have alleged that Bankman-Fried deliberately stole funds that belonged to FTX customers and secretly lent the assets to his crypto trading firm Alameda Research. They produced several key witnesses over the last month who corroborated those claims.

Crypto platform Gemini Trust Co. is suing bankrupt crypto lender Genesis Global Holdco LLC in an attempt to determine who rightfully owns a slug of shares in the Grayscale Bitcoin Trust now worth nearly $1.6 billion, Bloomberg News reported. In a bankruptcy-court lawsuit filed Friday, Gemini asked a federal judge to find that Genesis has no right to more than 60 million GBTC shares promised as collateral to users of Gemini’s Earn product. The shares at issue — most of which are still held by Genesis or its affiliates — should not be used to repay other Genesis creditors, the company argues. The lawsuit comes just days after Genesis said it was dropping a proposed settlement with its parent company, Digital Currency Group, in favor of suing the firm. The settlement was a cornerstone of a debt-repayment plan that could have allowed Genesis creditors to recover between 70 and 90 cents on the dollar, according to Genesis. Gemini disputed those estimates. Through its new lawsuit, Gemini says it intends to clarify the value of its claims against Genesis and eventually tap the GBTC shares to repay its users.

Johnson & Johnson faces at least 18 jury trials over the next year tied to claims of tainted talc in its iconic baby powder, prompting the company to consider a third bankruptcy filing in hopes of fostering a global settlement, Bloomberg News reported. J&J has talc cases set for trial everywhere from Pennsylvania to California between November and December 2024, some of which involve consolidated claims by more than a half-dozen plaintiffs, according to their lawyers. Those trials were scheduled after a judge in July threw out a J&J unit’s latest chapter 11 case aimed at resolving all current and future talc claims. Since 2016, J&J has been hit with at least $570 million in damage awards over talc-related cancer claims and paid out at least $2.5 billion in settlements, according to data compiled by Bloomberg.

FTX founder Sam Bankman-Fried previewed a potential defense Thursday when he told a federal judge that he relied on the blessing of lawyers to make business decisions such as deleting communications and making loans to himself, actions that prosecutors said allowed him to commit the crimes that led to the implosion of his crypto exchange, the Wall Street Journal reported. Bankman-Fried, on trial for fraud, money laundering and other offenses, had been expected to testify in front of a Manhattan federal jury on Thursday afternoon. Instead, in what amounted to an unusual practice session after the jury was dismissed for the day, U.S. District Judge Lewis Kaplan required the FTX founder to walk through several subjects that were in dispute so the judge could rule on what Bankman-Fried could say to jurors. Wearing an oversize gray suit and purple tie, Bankman-Fried began steadily and confidently, walking through business decisions that he said were guided by legal advice. But the rehearsal quickly turned when the prosecution came out swinging. Under cross examination, Bankman-Fried testified that he couldn’t recall specific conversations with the lawyers who he earlier said had overseen bank accounts, loans and communication policies. He at times was evasive and stumbled while saying he didn’t remember key details of the alleged conduct in question. Assistant U.S. Attorney Danielle Sassoon pressed Bankman-Fried on whether he had proof of the involvement of certain lawyers. “Do you have any paper records of these consultations?” she asked. Bankman-Fried said he had requested such records but didn’t have them. Under other questioning, he said he had little knowledge of some inner workings of the company he created.

FTX founder Sam Bankman-Fried has decided to testify in his own defense, a legal gamble that sets up a dramatic conclusion to his criminal trial in New York City, YahooFinance.com reported. The 31-year-old, who pleaded not guilty to seven counts of fraud and money laundering, has sat silently at his Manhattan trial for the last three weeks while prosecutors outlined their version of what happened to $8 billion in missing FTX customer deposits. He could take the stand as early as today, when the trial is scheduled to resume. His attorneys reportedly told U.S. District Judge Lewis Kaplan on Wednesday that Bankman-Fried would testify. Once Bankman-Fried takes the witness stand he opens himself up to significant risk because he can be cross-examined "extensively," said Northwestern University criminal law professor Juliet Sorensen. The government, which is expected to rest its case as soon as Thursday, alleges that FTX customers couldn't withdraw their money during the exchange's final days in November 2022 because Bankman-Fried had allowed his crypto trading fund, Alameda Research, to spend it. That claim was backed up by testimony from friends and former classmates Bankman-Fried hired for top jobs at FTX and Alameda. Some of those executives pleaded guilty to multiple felonies and agreed to testify against him.
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In related news, Prices for FTX Group claims shot higher after an adviser to the failed crypto conglomerate said it is considering proposals from three bidders for its currently shuttered exchange, Bloomberg News reported. Cherokee Acquisition, which brokers bankruptcy claims, is now quoting larger FTX claims between 50 and 53 cents on the dollar, according to founder Vladimir Jelisavcic. Prices were in the low-to-mid 40 cents range last week. FTX claim prices have been rising relatively steadily in the year since the crypto empire collapsed into bankruptcy and advisers began recovering billions of dollars in assets. Major hedge funds have also been buying and selling the claims, which range from the rights to FTX accounts to the damages owed as a result of an abandoned contract. On Tuesday, FTX investment banker Kevin M. Cofsky said in court that the company is engaging with “multiple parties every day.” Options under consideration include selling the entire exchange, bringing in a partner to help restart the exchange or rebooting it by itself.
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The Buffalo (N.Y.) Diocese is offering up to $100 million to settle child sex abuse claims in its federal bankruptcy case, the Buffalo News reported. As much as half of that would come from parishes, schools and other Catholic entities, while the diocese would also need to sell its Catholic Center on Main Street, the former Christ the King Seminary campus in the Town of Aurora and other properties. Those details were revealed in court papers filed late Monday in which diocese lawyers sought a preliminary injunction to keep all sex abuse lawsuits against parishes and schools grounded while mediated negotiations in the diocese bankruptcy case continue. Court papers said that the $100 million does not include insurance funds, while suggesting that insurance companies additionally could contribute “perhaps even hundreds of millions of dollars” to a settlement. Ilan D. Scharf, lead attorney for the unsecured creditors' committee that represents about 850 abuse claimants in the Buffalo Diocese bankruptcy case, declined to comment Tuesday on the numbers unveiled by the diocese lawyers. But some plaintiffs' lawyers on Tuesday accused the diocese of trying to "silence survivors" in its motion to halt the lawsuits. The Buffalo Diocese settlement offer appears to be very similar to the pending chapter 11 reorganization plan the Syracuse Diocese announced in July. Syracuse Bishop Douglas J. Lucia at the time said that the diocese had reached a deal with its creditors committee in which it would pay $50 million to a settlement trust, while its parishes would contribute $45 million, and $5 million would come from other Catholic entities. The full plan could be filed in court as early as next month.