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The embattled Roman Catholic Diocese of Buffalo filed for bankruptcy protection on Friday, taking another major step in its effort to recover from a clergy misconduct scandal that’s been the basis for hundreds of lawsuits, Vatican intervention and the resignation of its bishop, the Associated Press reported. The Buffalo diocese has faced particular turmoil in recent months, culminating in the Dec. 4 resignation of Bishop Richard Malone following a Vatican-mandated investigation. Malone had faced intense pressure from members of his staff, clergy and the public to step down amid criticism that he withheld the names of dozens of credibly accused priests and mishandled reports of misconduct against others. Albany Bishop Edward Scharfenberger called the bankruptcy filing “a path forward to healing.” The chapter 11 filing estimates between $10 million and $50 million in assets and between $50 million and $100 million in liabilities. The number of creditors is estimated at between 200 and 999. The diocese already has paid out about $18 million — including $1.5 million from the sale of the bishop’s mansion — to more than 100 victims under an independent compensation program established in 2018. It faces more than 250 new lawsuits filed since August, when the New York’s Child Victims Act suspended the statute of limitations to give victims of childhood abuse one year to pursue even decades-old allegations. The number of suits is expected to grow to more than 400, financial director Charles Mendolera said in a court filing. The diocese reported a $5 million loss in 2019.

California’s utilities regulator has proposed an increased $2.14 billion fine on PG&E Corp. for its role in causing the devastating 2017 and 2018 wildfires in Northern California, Reuters reported. The decision raises the penalty by $462 million and would be the largest ever imposed, the California Public Utilities Commission (CPUC) said. It would become final if PG&E agrees within 20 days, and will modify a multi-party settlement reached by the company with the CPUC and union representatives in December. The new settlement also requires that potential tax savings in excess of $500 million be applied to the benefit of PG&E’s customers, CPUC said. The San-Francisco based utility filed for chapter 11 bankruptcy protection in January last year, citing potential liabilities in excess of $30 billion from major wildfires sparked by its equipment in 2017 and 2018. State fire investigators in May determined that PG&E transmission lines caused the deadliest and most destructive wildfire on record in California, the wind-driven Camp Fire that killed 85 people in and around the town of Paradise in 2018. Earlier this month, the company proposed an updated reorganization plan, aimed at addressing concerns raised by California Governor Gavin Newsom, who criticized its previous plan for lacking major changes to governance and tougher safety enforcement mechanisms mandated under a recent state wildfire statute.

The judge overseeing PG&E Corp.’s bankruptcy opened the door to reducing government agency claims against the troubled utility to $290 million, a fraction of the billions federal authorities say they are owed, the Wall Street Journal reported. The Federal Emergency Management Agency and the California Governor’s Office of Emergency Services are seeking $3.9 billion and $2.4 billion, respectively, from San Francisco-based PG&E for services provided in the aftermath of three deadly wildfires linked to the utility’s equipment. The agencies’ claims are an obstacle to PG&E’s bankruptcy exit proposal, which includes $47 billion worth of settlements with bondholders, insurers, municipalities and fire victims. PG&E lumped government agency claims together with people and businesses affected by the fires, asking them to share in a $13.5 billion compensation trust. The agencies aren’t happy being categorized in the same group as fire victims. The utility has said that the agencies are trying to take money away from fire victims, who want the agencies’ claims expunged. At a hearing in the U.S. Bankruptcy Court in San Francisco, Michael Tye, a Justice Department lawyer, argued that FEMA must be compensated for its rebuilding, housing and repair work after the wildfires because PG&E was negligent in its upkeep of the transmission lines that sparked the wildfires. He said that PG&E has benefited from FEMA payments to fire victims and should cover those costs. Matt Hine, a lawyer representing the California agency, acknowledged that its claim and FEMA’s overlap with each other. Most of the agency’s claims are for money it owes to FEMA for repair, rebuilding and other services. Hine said all but $290 million of California’s claim is really owed to FEMA. In response, Judge Dennis Montali repeatedly raised the possibility of disallowing FEMA’s claims and only compensating the state for the portion of its claim that doesn’t overlap with FEMA’s claim. He didn’t make a final decision on the matter at the hearing.

Drugmaker Mallinckrodt PLC said on Tuesday that it reached a settlement worth more than $1.6 billion with 47 states and U.S. territories and lawyers representing thousands of local governments to settle liabilities stemming from the opioid addiction crisis, WSJ Pro Bankruptcy reported. Under the settlement proposal, state and local governments would receive $1.6 billion of payments, phased out over eight years, and warrants for a minority stake in the company. Mallinckrodt’s generics subsidiaries would file for chapter 11 to implement the proposed deal, though the Ireland-based parent will stay out of bankruptcy. If approved in bankruptcy court, the settlement would bring closure to Mallinckrodt’s share of thousands of lawsuits filed against the company by cities, counties and Native American tribes surrounding the public costs of opioid abuse. The settlement eliminates the possibility of a bankruptcy filing by Mallinckrodt itself, which had been a concern among market investors, J.P. Morgan Chase & Co. analyst Chris Schott said in a research note yesterday.

California power producer PG&E Corp said yesterday that it plans to raise up to $25.68 billion by selling securities, as it works its way out of the bankruptcy process, Reuters reported. The company is restructuring amid chapter 11 proceedings, while trying to bounce back from the negative publicity after its equipment in California was blamed for the deadly wildfires. PG&E needs to exit bankruptcy by June 30 to participate in a state-backed fund that would help power utilities cushion the hit from wildfires. 

Drugmaker Mallinckrodt PLC is finalizing a settlement proposal worth at least $1.6 billion that would place its U.S. generic-drug business into bankruptcy to address coming debt maturities and liabilities stemming from the opioid crisis, WSJ Pro Bankruptcy reported. The Ireland-based drugmaker is close to a proposed deal that includes a chapter 11 filing covering its U.S. generics business and a resolution of claims from hundreds of state and local governments stemming from the cost of combating opioid addiction. The settlement offers $1.6 billion to state and local governments over eight years and warrants to buy an equity stake in Mallinckrodt. The proposal, which would also require court approval, could be announced as soon as today. Mallinckrodt, one of the largest opioid makers in the U.S., previously acknowledged the risk of a bankruptcy over allegations it and other drugmakers misrepresented the health risks associated with the powerful painkillers they made.

The Boy Scouts of America was dogged by sex-abuse claims for more than 50 years before it implemented key child-safety policies in the late 1980s. Now, after more than a dozen states changed their statute-of-limitations laws in 2019 to allow lawsuits based on decades-old allegations, hundreds of men are coming forward to say they were abused decades ago, the Wall Street Journal reported. The approximately 275 resulting suits caused the Boy Scouts to file for bankruptcy protection last week, halting all current cases. The youth group said that it plans to set up a fund through the bankruptcy process to compensate victims. In contrast to the plight of the Catholic Church, which has wrestled with well-publicized claims of sex abuse for decades, the Boy Scouts avoided widespread attention until rather recently. Largely shielding the organization were the nation’s patchwork of statute-of-limitations laws, ineligible volunteer files that were kept confidential and a general unwillingness among young boys to bring forward their accounts of abuse. Public awareness grew with a 2010 case in Oregon in which a jury awarded a man who was sexually abused in the early 1980s with nearly $20 million. The Oregon Supreme Court also ordered the youth organization to release nearly 1,250 confidential files of alleged abusers, bringing more attention to abuse claims in the Boy Scouts.

Former Hollywood producer Harvey Weinstein was convicted of rape and sexual assault against two women and led off to prison in handcuffs yesterday, the Associated Press reported. While it was not the across-the-board victory prosecutors and his accusers had hoped for, it could put Weinstein behind bars for the rest of his life as the charges carry up to 29 years in prison. The jury of seven men and five women took five days to find Weinstein guilty of raping an aspiring actress in a New York City hotel room in 2013 and sexually assaulting production assistant Mimi Haleyi at his apartment in 2006 by forcibly performing oral sex on her. He was acquitted on the most serious charges, two counts of predatory sexual assault, each carrying up to life in prison. Weinstein’s studio, the Weinstein Co., went bankrupt after his disgrace. A tentative settlement was reached last year to resolve nearly all lawsuits stemming from the scandal. It would pay Weinstein’s accusers about $25 million, but he would not have to admit any wrongdoing or personally pay anything; the studio’s insurance would cover the cost.

A proposed USA Gymnastics tiered settlement system would pay some sexual assault victims of former U.S. team doctor Larry Nassar only $82,550, according to multiple reports on Saturday detailing the payment plans. Simone Biles, expected to be among the stars of this year's Tokyo Olympics after winning four gold medals at Rio in 2016 and 19 world titles including a fifth all-around crown last year, would be among 66 gymnasts to receive the top-level settlement amount of $1.25 million. An attorney for hundreds of victims of Nassar's abuse says the total $215 million settlement offer is insufficient and releases too many people from further claims, including the US Olympic and Paralympic Committee, former USA Gymnastics chief executive Steve Penny and former national team directors Bela and Martha Karolyi. A disclosure statement filed with the U.S. Bankruptcy Court for the Southern District of Indiana was outlined in reports by the Orange County Register and ESPN, detailing what 517 people Nassar assaulted would be paid under terms of the settlement.

Tom Vilsack, a former Iowa governor and U.S agriculture secretary, will monitor Purdue Pharma to ensure the OxyContin maker does not revive an aggressive marketing effort that critics say overstated the benefits of its opioid painkillers and downplayed the danger of addiction, the Associated Press reported. Purdue Pharma announced the appointment on Friday as part of its federal bankruptcy proceedings. Vilsack worked on rural opioid issues as agriculture secretary under former President Barack Obama. Purdue is facing more than 2,000 lawsuits over its role in the nation's opioid crisis, which has been linked to more than 430,000 deaths in the U.S. since 2000. The Stamford, Connecticut-based company entered bankruptcy court in White Plains, N.Y., last year as part of an effort to settle those claims. It's trying to get buy-in for a proposed settlement that could be worth more than $10 billion over time. The lawsuits against Purdue and the members of the Sackler family that own the company are on hold while the parties try to reach a settlement. Purdue has already agreed to cease the marketing practices at the heart of the lawsuits. Critics say its marketing and sales practices, including to doctors, helped fuel the crisis beginning in the late 1990s.