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Abuse victims say that the Roman Catholic Archdiocese of New Orleans is seeking bankruptcy protection to gain a “tactical advantage” in pending litigation. That’s according to a petition submitted on Friday in federal court asking a judge to dismiss the church’s chapter 11 filing, WDSU.com reported. The victims are represented in the bankruptcy as a group called the Unsecured Creditors Committee. Its request for a ”bad faith” dismissal asks Bankruptcy Judge Meredith Grabill to consider whether the archdiocese legitimately needed to reorganize its finances or was trying to gain an advantage in the lawsuits it faces from abuse victims. The archdiocese has asked the court to set a Sept. 29 for any additional abuse victims to come forward. Attorneys for victims say they intend to oppose that move in court. In Friday’s dismissal request, the unsecured creditors' committee points out the archdiocese has repeatedly said it’s solvent. It claimed $200 million in personal property assets when it filed for bankruptcy earlier this year, according to the filing. The archdiocese issued a statement that “the Archdiocese of New Orleans has publicly stated the underlying concerns which led to the decision to file chapter 11 reorganization. The archdiocese will address the factual and legal inaccuracies in the UCC’s Motion to Dismiss at the appropriate time with the Bankruptcy Court.”

A federal bankruptcy judge is giving the Buffalo (N.Y.) Diocese two months to sort out a tangled web of historical insurance coverage and determine how those policies might be affected by Child Victims Act lawsuits against the diocese and parishes, schools and other Catholic entities, the Buffalo News reported. A chapter 11 filing in February immediately stopped lawsuits in state courts against the diocese from advancing as it goes through a reorganization. That same protection does not apply to parishes, which are separately incorporated and not part of the bankruptcy. But the diocese in May asked Chief Judge Carl Bucki of the U.S. Bankruptcy Court in the Western District to shield parishes, schools and other entities that also have been named as defendants in Child Victims Act cases. Diocese lawyers argued that without the stay the diocese would be drawn into those cases, forcing it to incur more legal costs and potentially leading to the depletion of insurance coverage that could be used to reach an equitable global settlement with childhood abuse victims. Diocese attorneys initially asked for a long-term injunction prohibiting Child Victims Act plaintiffs from advancing their cases in state courts until after the bankruptcy case is dismissed. They later amended the request for a stay through December, saying they need the time to clarify what insurance policies apply as the diocese tries to negotiate a settlement. Several lawyers for plaintiffs in CVA cases objected to the diocese’s motion, and an attorney for the official committee of unsecured creditors, which consists of CVA plaintiffs, characterized the move as a “flagrant attempt to absolve” parishes and other sued Catholic organizations of any liability. Ilan D. Scharf, the committee’s lawyer, urged Bucki to consider a temporary stay of no more than 60 days. In a 13-page decision on Thursday, Bucki described the character and status of the diocese and parish insurance policies as “murky, jumbled, questionable and uncertain” and said the diocese had failed to prove that litigation against parishes would necessarily deplete the diocese’s assets. But Bucki also said he was “not dismissive” of the diocese’s argument that identifying insurance coverage from decades ago is “a monumental task.” “Still we must balance investigatory challenges against the rights of victims to achieve a reasonably prompt resolution of claims involving non-debtors,” he said.

Pacific Gas & Electric, California’s largest utility, emerged from bankruptcy on Wednesday and put $5.4 billion in cash and 22.19 percent of its stock into a trust for victims of wildfires caused by the utility’s equipment, the New York Times reported. The utility exits bankruptcy as a new company with a restructured board of directors and an interim chief executive officer, Bill Smith. The chief executive who led it for much of the last year, Bill Johnson, retired on Tuesday. PG&E sought bankruptcy protection in January 2019 after accumulating an estimated $30 billion in liability for fires started by its poorly maintained equipment. One of the blazes, the 2018 Camp Fire, killed scores of people and destroyed the town of Paradise. With its bankruptcy behind it, PG&E is hoping to recast its public image. It has pledged to state lawmakers and regulators that it will improve safety and compensate wildfire victims. To that end, the company paid most of the money it owes under a $13.5 billion settlement into a trust fund that will compensate the tens of thousands of people who lost homes and businesses in wildfires. The $13.5 billion will be evenly split in cash and company stock; PG&E will deposit the remaining cash into the fund in 2021 and 2022. A trust administrator will issue payments to victims and sell the stock over time.

Lawyers for men claiming they were sexually abused by Boy Scouts of America volunteers as children said they suspect some local councils of the youth organization are moving assets out of their reach, WSJ Pro Bankruptcy reported. The suspicion surfaced in a filing Tuesday in the bankruptcy court where the national Boy Scouts group sought protection from lawsuits related to decades of alleged sexual assaults. The bankruptcy has stopped hundreds of lawsuits blaming the national organization for failing to root out sexual predators from its ranks. An injunction extended the pause on litigation to the Boy Scouts’ many local councils, which operate troops scattered across the country and hold the bulk of the organization’s wealth. The local councils aren’t themselves bankrupt but are key players in the proceedings. The land and other property they hold could help fund a settlement with victims, but the councils say they are legally separate from the Boy Scouts and don’t share the national organization’s liability.

Women who have accused Harvey Weinstein of sexual assault or say they were harassed while working at his former film studio will be entitled to payments from a nearly $19 million fund being created to compensate them, months after the former Hollywood producer was convicted of sex crimes, the Wall Street Journal reported. Money for the fund is coming from insurance as part of a settlement resolving civil lawsuits including a proposed class action against Weinstein and a separate civil-rights suit brought by the New York attorney general’s office. That lawsuit accuses Weinstein Co.’s former executives and board members of failing to protect employees from a hostile work environment and its namesake chairman’s sexual misconduct. A New York jury in February found Weinstein guilty of first-degree criminal sexual act and third-degree rape charges, resulting in a 23-year prison sentence. He faces criminal prosecution on similar allegations in Los Angeles. The settlement deal must be approved by a U.S. bankruptcy judge in Wilmington, Del., where Weinstein Co. is being liquidated. The product of more than a year of on-and-off negotiations, the agreement also requires approval from a federal judge in New York, where the class-action lawsuit was filed.

PG&E Corp. has raised about $5.5 billion from a share offering and sale of equity units as the biggest U.S. power provider by customers looks to emerge from chapter 11 bankruptcy next week, Reuters reported. The company sold just over 423 million shares at $9.50 apiece to raise about $4 billion, while a separate, previously announced equity units offering raised just under $1.20 billion, giving it net proceeds after costs of around $5.15 billion. The share offering was at a 2.4% discount to the stock’s Thursday close. The fund raising took place days after a U.S. bankruptcy court approved the company’s chapter 11 reorganization plan, taking it a step closer to exiting from bankruptcy. Earlier this month, PG&E had said that it would be raising $5.75 billion from public offerings.

Bayer AG, after more than a year of talks, agreed to pay as much as $10.9 billion to settle close to 100,000 U.S. lawsuits claiming that its widely-used weedkiller Roundup caused cancer, resolving litigation that has pummeled the company’s share price, Reuters reported. The German drugs and pesticides maker has come to terms with about 75 percent of the 125,000 filed and unfiled claims overall, it said in a statement yesterday of the deal to end legal disputes it inherited with its $63 billion takeover of Monsanto in 2018. The settled cases over Roundup and other glyphosate-based weedkillers account for about 95% of those currently set for trial, it added. The company said it will make a payment of $8.8 billion to $9.6 billion to resolve the current Roundup litigation — including an allowance expected to cover unresolved claims — and $1.25 billion to support a separate class agreement to address potential future litigation. Read more.

To read more about litigation or liquidation trusts in bankruptcy, be sure to pick up a copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts. 

PG&E Corp. launched two public equity offerings totaling $5.23 billion as it prepares to exit the biggest utility bankruptcy in U.S. history, Bloomberg News reported. The company plans to raise $4 billion from a common stock offering and $1.23 billion from a separate sale of equity units, according to a statement yesterday. The offerings are expected to price this week and close on or about July 1, at which point PG&E aims to exit chapter 11. PG&E has already raised more than $13 billion in the debt markets to finance its bankruptcy, which began after its equipment sparked deadly wildfires in Northern California and saddled it with $30 billion in liabilities. PG&E’s case is the rare exception to the general rule that shareholders typically get nothing in bankruptcy. That’s because the utility’s shareholders negotiated a plan to raise billions of dollars to help pay off wildfire victims. The deal dilutes current shareholders, but it lets them keep their stakes. The equity units PG&E is offering will consist of prepaid stock-purchase contracts and an undivided beneficial ownership interest in specified zero-coupon U.S. treasury strips. Goldman Sachs & Co. and JPMorgan Chase & Co. are joint lead book-running managers for the offerings. Barclays, Citigroup Inc. and BofA Securities are acting as joint book-running managers for both the common stock and the equity units offerings.

PG&E Corp. said that its chapter 11 reorganization plan has been confirmed by the U.S. Bankruptcy Court for the Northern District of California, bringing the power provider one step closer to emerging from bankruptcy and participating in a state-backed wildfire fund, Reuters reported. The court’s approval follows the confirmation of the plan by power regulator California Public Utilities Commission in May. The company said that it expects to emerge from bankruptcy in July and that it is on track to participate in a state-backed wildfire fund, which reduces liability for investor-owned utilities but requires them to spend billions of dollars upgrading equipment. The utility filed for chapter 11 protection in January last year, citing potential liabilities exceeding $30 billion from major wildfires sparked by its equipment in 2017 and 2018. Earlier last week, the company pleaded guilty to 84 counts of involuntary manslaughter stemming from a devastating 2018 wildfire in Northern California touched off by the utility company’s power lines.

The Roman Catholic Diocese of Syracuse (N.Y.) has filed for chapter 11 bankruptcy, just days after 38 people filed Child Victims Act lawsuits against the church, Syracuse.com reported. Since last year, the diocese has faced dozens of claims that its priests sexually abused children and that officials covered up the abuse for decades. On Wednesday, 38 more victims filed lawsuits, including a Central New York grandmother. The filings in court show the diocese has assets of more than $10 million but less than $50 million. Lawyers for the diocese from Syracuse firm Bond, Schoeneck & King estimated the diocese has between 100 and 200 creditors and up to $100 million in liabilities. The filings also revealed the diocese received a $1.3 million federal Paycheck Protection Program loan to help cover expenses during the coronavirus pandemic.