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PG&E Corp. said in court papers on Friday that it has debt financing commitments of $34.35 billion for a planned chapter 11 bankruptcy reorganization, countering a group of noteholders that has proposed its own reorganization plan for the California power producer, Reuters reported. PG&E in a filing in U.S. Bankruptcy Court in San Francisco said the commitments are from leading money center banks and have terms superior to those in the plan the noteholders want to file. The commitments will “fully fund” a reorganization plan so PG&E can have one confirmed by June 30, 2020, the company said. PG&E has also obtained more than $14 billion in equity commitments from other investors and has struck an $11 billion settlement with an insurers group and a $1 billion settlement with a group of local governments and public entities hit hard by the wildfires that pushed the company to file for bankruptcy. San Francisco-based PG&E filed for chapter 11 bankruptcy protection in January in the aftermath of blazes in 2017 and 2018 blamed on its equipment. At the time, PG&E anticipated wildfire-related liabilities of more than $30 billion. A group of PG&E noteholders, including Apollo Capital Management and Elliott Management Corp among others, last week unveiled a revised version of their proposed reorganization plan. It would put $29.2 billion in new money into PG&E, up from a prior $28.4 billion offer, in exchange for new debt and a controlling equity stake. The committee representing individual wildfire victims in PG&E’s bankruptcy supports the noteholders’ plan as it would create a $14.5 billion trust to pay their claims.

OxyContin maker Purdue Pharma LP steered up to $13 billion in profits to the company’s controlling Sackler family, according to U.S. states opposing efforts to halt lawsuits alleging the company and its owners helped fuel the U.S. opioid epidemic, Reuters reported. The Sacklers received the money from Purdue during an unspecified time frame, according to court documents and portions of a deposition filed in the drugmaker’s bankruptcy proceedings this week. Purdue ultimately transferred $12 billion or $13 billion to the family, a company adviser testified in the deposition. The deposition, taken last week, was revealed in court filings on Thursday and Friday. The financial figure is significantly larger than the roughly $4 billion previous lawsuits have alleged the Sacklers took out of Purdue, and was cited as part of coordinated legal broadsides this week against the company’s attempts to shield itself and the family from sprawling opioid litigation. Many states want the Sacklers to contribute more than an initial $3 billion they have pledged toward resolving the lawsuits as part of a settlement Purdue has proposed. Attorneys general from 24 states and the District of Columbia on Friday objected to Purdue’s September request that a U.S. bankruptcy judge halt more than 2,600 lawsuits seeking billions of dollars in damages, and they raised financial transfers to the Sacklers in their legal arguments.

U.S. state officials are due today to launch a counterattack against OxyContin maker Purdue Pharma LP over its attempt to shield the company and its controlling Sackler family from thousands of lawsuits accusing the company of fueling the opioid epidemic, Reuters reported. Attorneys general from Massachusetts, Pennsylvania and other states are expected to object to Purdue’s request that a U.S. bankruptcy judge shield the company from more than 2,600 lawsuits seeking billions of dollars in damages, according to court filings and three people familiar with the preparations. Purdue filed for chapter 11 protection last month after reaching a deal it estimated valued at more than $10 billion that would resolve the bulk of the cases, most of which were brought by states and local governments. The lawsuits allege that Purdue and the Sacklers contributed to a public health crisis that has claimed the lives of nearly 400,000 people since 1999 by aggressively marketing opioids while downplaying their addiction and overdose risks. The company said that it needed to pause the litigation for about nine months so it could negotiate settlements with the remaining plaintiffs and preserve money that would otherwise be spent fighting the cases. Purdue also asked the bankruptcy judge overseeing its case to halt litigation against members of the Sackler family, some of whom previously sat on Purdue’s board.

The student loan servicer that manages a deeply troubled program intended to forgive public servants’ education debts failed in its most basic tasks, depriving thousands of borrowers of a benefit they had earned, New York’s attorney general said in a federal lawsuit filed yesterday, the New York Times reported. The servicer, the Pennsylvania Higher Education Assistance Agency (PHEAA), which does business under the name FedLoan, is the sole servicer for the federal government’s Public Service Loan Forgiveness Program. That program has become a notorious quagmire: Nearly 99 percent of those who applied to have their loans forgiven were denied, according to the latest data from the Education Department. PHEAA’s failings directly caused many borrowers’ grim outcomes, Attorney General Letitia James said in her complaint, which was filed in Manhattan federal court. The servicer miscounted qualifying payments, failed to apply its policies consistently and left borrowers in limbo for as long as a year when they tried to get PHEAA to fix its mistakes. New York is the second state to sue PHEAA over its handling of the forgiveness program. Massachusetts sued the servicer in state court in 2017, and that case is continuing.

PG&E Corp. is facing rising dissatisfaction with its handling of massive fire damage claims in bankruptcy as another creditor group demanded the embattled utility relinquish control over repayment terms, WSJ Pro Bankruptcy reported. The development cuts against shareholders eager to preserve the value of their stakes in PG&E. Swamped by damage claims stemming from blazes linked to PG&E equipment, the company filed for chapter 11 in January and has drawn up a proposal to pay off billions of dollars in fire liabilities. Large shareholders are backing PG&E’s bankruptcy exit plan and many of them have committed to help fund the $14 billion the utility expects to need to bail itself out. But bondholders including Elliott Management Corp. and Värde Partners are floating a competing chapter 11 exit strategy under an alliance with victims of the wildfires. The rival plan leaves current shareholders with a sliver of value while treating wildfire claimants better than PG&E has proposed. A new wave of court filings on Tuesday from unsecured creditors, ratepayer advocates and the union representing about 11,000 PG&E workers supported stripping PG&E of its exclusive right to fix restructuring terms. One large group of fire victims also filed papers asking the court to hold the door wide open to anyone with money to help PG&E hit a June 2020 deadline for participating in a statewide wildfire fund.

Purdue Pharma LP has proposed a settlement in bankruptcy court that could provide as much as $10 billion to help U.S. communities cope with the opioid epidemic. But for some states, the moral cost of accepting the deal is too high because it relies on even more sales of OxyContin, the highly addictive painkiller that helped create the public-health crisis, Bloomberg News reported. The settlement offer calls for Purdue’s owners, the Sackler family, to pay at least $3 billion over seven years, with another $1 billion from current Purdue assets. The family, which amassed a $13 billion fortune, also would give up ownership of the company to a trust controlled by the states, counties and cities that sued Purdue, generating billions of dollars in additional income to be spent on treatment programs and law enforcement. About half the states have agreed to the deal, saying the payout would help ease the burden on taxpayers. The other half said they’ll fight it in bankruptcy court. A judge must decide if the proposal is sufficient to absolve Purdue and its owners of liability from more than 2,000 lawsuits. Massachusetts Attorney General Maura Healey, who sued Purdue last year and wants the company liquidated, said she’s concerned the settlement would be funded “by future sales of dangerous and addictive opioids.” Many opponents of the settlement also say it falls short of the costs borne by U.S. communities and that the payout may be less than promised. They claim the Sacklers are getting off too cheaply and should pay a bigger financial penalty for their role in fostering an addiction epidemic that’s killed more than 400,000 Americans. But a distaste for the opioid business has emerged as potent stumbling block.

Johnson & Johnson yesterday said that it has agreed to a $20.4 million deal to avoid a coming trial accusing the company of helping spark an opioid-addiction crisis in two Ohio counties, the Wall Street Journal reported. The settlement makes J&J the fourth drugmaker to reach such a deal ahead of the trial, slated to begin later this month in federal court in Cleveland. The company said yesterday that the settlement allows it “to avoid the resource demands and uncertainty of a trial as it continues to seek meaningful progress in addressing the nation’s opioid crisis.” Yet the deal, which includes no admission of liability, still leaves J&J facing hundreds of other opioid lawsuits. The two Ohio counties behind the lawsuit, Cuyahoga and Summit, are home to cities including Cleveland and Akron that have been hit hard by the opioid crisis. J&J’s settlement includes a $10 million cash payment, a $5 million reimbursement of legal expenses the counties incurred in relation to the trial, and $5.4 million in charitable contributions to opioid-related nonprofits in the counties. Earlier this week, drugmaker Mallinckrodt PLC completed a $30 million deal with Cuyahoga and Summit counties. Endo International PLC had previously agreed to pay the counties $10 million, while Allergan PLC had agreed to pay $5 million to avoid the trial.

Mallinckrodt PLC recently changed its severance-package policy to allow for departing executives of the drug company to receive lump-sum payouts instead of installment payments, and ensuring the policy endures should it change ownership structure, such as liquidating or reorganizing, filings show, the Wall Street Journal reported. The drugmaker, whose stock is down some 90 percent this year, previously hired restructuring experts as it faces several challenges, including trying to resolve thousands of lawsuits over its alleged role in helping start the nation’s opioid crisis. A subcommittee of Mallinckrodt’s board of directors recently revised compensation and benefits for executives in the case of “involuntary termination of employment for any reason other than ‘cause,’ ” according to a U.S. Securities and Exchange Commission filing made last week. The changes include ensuring more than a year of salary upfront rather than installment payments for its C-suite, including two years of salary for the chief executive. The new policy can’t be revised during the period from about two months before any change to ownership structure — such as a sale, merger or reorganization — until two years afterward, according to the filing.

OxyContin maker Purdue Pharma LP recently tucked a $38 million bonus program into a run-of-the-mill bankruptcy filing to pay employee wages, raising questions from a federal bankruptcy watchdog, WSJ Pro Bankruptcy reported. U.S. Trustee William Harrington is faulting Purdue for trying to shuttle money to insiders under cover of a standard wage motion at the same time a bankruptcy judge is shielding the drug maker from lawsuits over its alleged role in the national opioid crisis. Purdue’s court filing, Harrington said, “pushes the boundaries far beyond the typical, narrowly tailored relief appropriate so early in a case.” The company filed for chapter 11 protection earlier this month. Its request to pay bonuses doesn’t name the recipients or say how many people will share in the bonus program, unlike most motions for permission to enhance pay in bankruptcy. “Purdue is asking the court to enter an order to allow the company to continue its pre-existing and longstanding compensation programs, such as giving employees an annual bonus, not to implement new ones,” the company said in a statement yesterday.

California regulators took steps yesterday to begin examining Pacific Gas and Electric Co.’s path out of bankruptcy, a crucial analysis they must complete in nine months in order for the utility to comply with a new state wildfire law, the San Francisco Chronicle reported. The California Public Utilities Commission voted unanimously in favor of opening the proceeding through which it eventually will determine whether to approve PG&E’s reorganization plan — the blueprint that will establish how the company pays victims of wildfires it caused and emerges from chapter 11 protection. PG&E’s bankruptcy judge and its state regulators have different roles in the case. While the bankruptcy court is concerned largely with the relationship between PG&E and its creditors, the commission’s top priority is the connection between the company and ratepayers. Commissioners must sign off on PG&E’s plan in order for it to become effective, and they have to do so by the end of June in order for the company to access a new fund that will protect it from future wildfire costs.