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More time is needed to sort out whether the CEO of OxyContin maker Purdue Pharma should receive a $1.3 million bonus next year, but the company should be allowed to pay about $35 million in bonuses to 682 other employees, the judge overseeing the company’s bankruptcy case said on Wednesday, the Associated Press reported. There were objections at the hearing only to payments to CEO Craig Landau and a group of nine other upper-level “insider” employees. State governments and a watchdog committee didn’t dispute the company’s contention that bonuses would be needed to keep employees working and the company running — especially after the company agreed to trim many of the bonuses. Bankruptcy Judge <b>Robert Drain</b> said that he would sign an order for all the employees except Landau to get bonuses next year. He said that it would contain a provision that it could be withheld from anyone found liable in lawsuits over the toll of the opioid crisis linked to more than 400,000 deaths in the U.S. since 2000. Purdue, based in Stamford, Conn., is in bankruptcy court as part of an effort to settle more than 2,700 lawsuits it’s facing over the toll of opioids.

Defunct opioid maker Insys Therapeutics Inc. faced tough questioning from a bankruptcy judge Wednesday over its plan to bar shareholders from suing anyone involved in the company’s demise, WSJ Pro Bankruptcy reported. “These are parties that are getting no compensation and are being asked to take positive action to not give a release,” Judge Kevin Gross said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., where he was considering Insys’s chapter 11 liquidation plan. The company filed for chapter 11 bankruptcy in June, after pleading guilty to mail fraud in connection with the sales of the powerful painkiller Subsys. It wants to end its bankruptcy by handing out its remaining cash and shutting down litigation, including lawsuits by shareholders, who are getting nothing. Yesterday, Judge Gross cleared Insys to begin polling creditors on its chapter 11 liquidation plan, which includes a forced ban on lawsuits applied to shareholders, unless they speak up quickly. After the voting, Insys must return to court to seek confirmation of its chapter 11 plan, and Judge Gross will take another look at the shareholder litigation ban, he said.

PG&E Corp. is nearing a settlement with victims of the wildfires that pushed the utility into bankruptcy, while clashing with California Gov. Gavin Newsom (D) about the best path out of chapter 11, the Wall Street Journal reported. Nancy Mitchell, the lawyer representing the governor, said Gov. Newsom wants assurances that PG&E will come out of bankruptcy financially stable, with cash to invest in new technology and improved safety practices. Tensions between PG&E and Gov. Newsom surfaced at a hearing yesterday in the U.S. Bankruptcy Court in San Francisco, as Mitchell spoke out against an $11 billion pact that would bind one of PG&E’s most powerful groups of creditors to supporting the company’s chapter 11 exit plan. The group, which includes insurance companies and big investors, would be pledged to oppose a rival restructuring strategy backed by bondholders and wildfire victims. In the coming weeks, Gov. Newsom is likely to make clear which plan he favors, according to Michael Stamer, lawyer for the bondholders. He spoke in court yesterday, after Mitchell said that California’s top executive has concerns about whether the company’s version of the plan will pass muster. PG&E, fire victims and major investors have been engaged in talks about a revamped chapter 11 plan. PG&E and fire victims are working to settle their differences, with an improved $13.5 billion payout for victims.

Opioid maker Insys Therapeutics Inc. has revised its bankruptcy windup plan in an effort to appease critics that feared the defunct company was too generous with its grants of legal immunity, WSJ Pro Bankruptcy reported. States, municipalities and Native American tribes that sued Insys for damages stemming from the opioid crisis will get a chance to challenge the company’s decisions about who can still be sued over its collapse, according to a filing in U.S. Bankruptcy Court in Wilmington, Del. The defunct company also made clear that most creditors will get pennies on the dollar of what they are owed, and the U.S. Department of Justice may get a fraction of a penny for its $283 million claim. Insys filed for chapter 11 protection in June, not long after former top executives were convicted of racketeering by a jury in Boston. The convictions, and guilty pleas by other former Insys leaders, were related to tactics that included the payment of kickbacks to drive sales of the company’s top moneymaker, Subsys. An under-the-tongue formulation of the powerful painkiller fentanyl designed for breakthrough cancer pain, Subsys was prescribed for conditions like back pain and ended up addicting many users. Insys sold off its pharmaceutical business while in bankruptcy in order to raise money to pay creditors. For weeks, the company faced opposition from many creditors to a bankruptcy plan that meant little cash for them but large barriers to continued lawsuits.

A damning report about the cause of the deadliest wildfire in California history poses a huge setback to Pacific Gas & Electric as it tries to resolve a complex bankruptcy and prove to its customers and elected officials that it takes safety seriously, the New York Times reported. PG&E repeatedly failed to properly maintain a power line built nearly a century ago even though it cuts through a heavily wooded and mountainous area that experiences strong winds, a 700-page report by the California Public Utilities Commission concluded. A live wire broke from the line, called the Caribou-Palermo, in November 2018 and ignited the Camp Fire, which killed 85 people and destroyed the town of Paradise. The report, which the commission posted on its website over the Thanksgiving holiday with no announcement, could jeopardize PG&E’s future as an independent business. The company was already on probation after being convicted of six federal criminal charges for causing another disaster — a gas pipeline explosion that killed eight people in San Bruno, south of San Francisco, in 2010. Critics of the company, including a group of California mayors and Gov. Gavin Newsom (D), have proposed selling PG&E to Warren E. Buffett’s holding company, breaking it up, having the state take it over or turning it into a cooperative owned by its customers. The report has also raised fresh questions about why the utilities commission did not identify PG&E’s safety lapses in previous investigations and audits of the company. The report did not address that issue but implied that the problems could have been discovered years earlier. It said that “long-duration exposure to higher winds, age and historical inspection methodologies likely all contributed” to the equipment failures that caused the fire.

After months of pressure from priests and lay leaders, the Vatican said today that it had accepted the resignation of Bishop Richard J. Malone of the Catholic Diocese of Buffalo, N.Y., effective immediately, the New York Times reported. Since the Vatican did not specify the reasons behind the resignation, it was unclear whether Bishop Malone had been forced to quit. A whistleblower previously revealed that Bishop Malone had kept files about abusive priests that he hid from the public. The Buffalo Diocese is facing more than 200 child sex abuse lawsuits under the Child Victims Act, and is under investigation by both the Federal Bureau of Investigation and the New York attorney general for its handling of abusive priests over decades.

The chief executive officer of OxyContin-maker Purdue Pharma LP should not collect a potential $1.3 million bonus when he has been accused of contributing to the opioid epidemic, a group of state attorneys general said yesterday in a court filing, Reuters reported. The attorneys general from 24 states said that Craig Landau should not collect a bonus that would lift his pay to $3.9 million because of his alleged role in downplaying the risks of Purdue’s drugs. The filing also said that Purdue increased Landau’s potential pay in 2018 “in preparation for the filing of this case,” and possibly to circumvent the bankruptcy code’s restrictions on such bonuses. Purdue is on track to pay $24 million in bonuses to eligible employees based on its 2019 performance so far, the company said in a Monday filing. However, Purdue said that to get support for its bonus plan it would limit Landau’s potential bonus to 50%, or $1.3 million of his $2.6 million base pay. Other employees would still get their target bonus. The attorneys general said documents that have not been made public tie Landau to the alleged misconduct by the Sackler family owners of Purdue.

A wave of new laws in 15 states that allow people to make claims of sexual abuse going back decades could result in thousands of new cases against the Roman Catholic Church and more than $4 billion in payouts, the Associated Press reported. It's a financial reckoning playing out in such populous Catholic strongholds as New York, California and New Jersey, among the eight states that go the furthest with "lookback windows" that allow sex abuse claims no matter how old. AP interviews with more than a dozen lawyers and clergy abuse watchdog groups offered a wide range of estimates but many said that they expected at least 5,000 new cases against the church in New York, New Jersey and California alone, resulting in potential payouts that could surpass the $4 billion paid out since the clergy sex abuse first came to light in the 1980s. This summer, when New York state opened its one-year window allowing sexual abuse suits with no statute of limitations, more than 400 cases against the church and other institutions were filed on the first day alone. That number is now up to more than 1,000, with most against the church. New Jersey's two-year window opens this week and California's three-year window begins in the new year, with a new provision that allows plaintiffs to collect triple damages if a demonstrable cover-up can be shown. Arizona, Montana and Vermont opened ones earlier this year.

Bankrupt California power producer PG&E Corp. did not properly inspect and replace transmission lines before a faulty wire sparked a wildfire that killed more than 80 people in 2018, a probe by a state regulator has concluded, Reuters reported. The Caribou-Palermo transmission line was identified as the cause of the Camp Fire last year, which virtually incinerated the Northern California town of Paradise and stands as the state’s most lethal blaze. “PG&E failed to maintain an effective inspection and maintenance program to identify and correct hazardous conditions on its transmission lines ... as are necessary to promote the safety and health of its patrons and the public,” a 700-page report by the California Public Utilities Commission said. The report was dated Nov. 8, 2019, but it was released to the public yesterday. The probe concluded that PG&E’s inspection shortcomings were part of a pattern of ‘inadequate’ execution of those tasks. In response to the report, PG&E acknowledged the role of its equipment in the fire and apologized. The utility filed for bankruptcy in January, citing potential civil liabilities of more than $30 billion from wildfires linked to its gear.

Imerys SA is exploring options for its North American talc operations, which filed for bankruptcy after being drawn into cancer lawsuits connected to Johnson & Johnson’s baby powder, Bloomberg News reported. The company is considering strategic alternatives that could include a sale of the businesses. Paris-based Imerys’ U.S. unit, Imerys Talc America, plans to work with advisers at PJT Partners Inc., though a formal mandate will require court approval. Three North American units of Imerys filed for chapter 11 protection from their creditors in February, citing more than 14,000 claims in U.S. courts brought mostly by women who allege the company’s talc caused their ovarian cancer. Others say they have mesothelioma brought on by asbestos in the talc. The businesses generated about $174 million of combined revenue in 2018, according to a court filing. Deliberations are at an early stage, and no final decisions have been made. Proceeds from any sale could provide funds for settling lawsuits. When the North American talc business filed for bankruptcy, Alexandra Picard, who was chief financial officer at the time, said the goal was to set up a trust to handle cancer and asbestos lawsuits filed against Imerys Talc. To set up and fund the trust, Imerys Talc planned to negotiate with its creditors, including those with medical claims, and insurers. So far, the company has not sought permission to sell itself at a court-supervised auction, according to court documents.