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In the decade since R. Allen Stanford’s international financial empire was exposed as a fiction, investors in his Ponzi scheme have recouped just a tiny fraction of the life savings many of them lost. Now a small group of individuals, backed by hedge funds, is making a last-ditch effort to recover money from five banks that they contend turned a blind eye to Stanford’s fraud, the Wall Street Journal reported. In a lawsuit filed in Dallas federal court on Friday, these investors alleged that the banks “aided, abetted and conspired” with Stanford to steal from investors and that “their close profitable relationship with such a wealthy, high-profile customer led them to callously ignore R.A. Stanford’s fraud.” The five banks they sued on Friday are HSBC Bank PLC, Toronto-Dominion Bank, Bank of Houston, Trustmark National Bank, and Societe Generale Private Banking. Most of these institutions had long-term relationships with Stanford and his entities, and those ties gave them insights into the fraud as it was happening, the investors allege. In addition to filing the new lawsuit, investors in Stanford have lobbied lawmakers in recent months, met with Securities and Exchange Commission Chairman Jay Clayton and pressed for the return of frozen overseas assets. Since Stanford’s arrest and the collapse of Stanford International Bank Ltd. in 2009, what remains of his far-flung financial operation has been wound down by lawyers and consultants in Antigua and Dallas, where court-appointed liquidators have sold assets, sued alleged beneficiaries of the fraud and distributed proceeds across roughly 18,000 victims.

More than a year after its filing, Stanley Waleski’s lawsuit seeking $619.3 million more for 4,360 past and present Avoca, Pa.-area residents exposed to contamination is still bouncing from court to court, the Wilkes-Barre Times Leader reported. Waleski initiated the suit on the group’s behalf in April 2018 in the Luzerne County Court of Common Pleas. The defendants — Philadelphia law firm Montgomery, McCracken, Walker & Rhoads and two of its attorneys — moved the case to federal court in Scranton last June through an automatic action known as a removal. The Montgomery firm successfully argued for the case to be transferred again to federal court in New York City. That jurisdiction’s presiding U.S. District Judge Alison J. Nathan issued an order in February moving the suit to federal bankruptcy court in New York City. Bankruptcy Judge Michael E. Wiles is in the process of deciding whether the suit will remain in his New York City court or be moved again, records show. The Avoca plaintiffs were involved in 2005 litigation filed by the Powell Law Group seeking compensation for health problems they attributed to creosote exposure from the defunct Kerr-McGee Corp. wood treatment plant that operated in the borough for four decades until 1996. Their claims were ultimately processed through the 2009 bankruptcy of Kerr-McGee and related entities under the umbrella of Tronox Inc. — a case adjudicated in the federal bankruptcy court in New York City. Powell Law had hired the Montgomery firm for its bankruptcy expertise in 2009. Waleski’s complaint accuses the Montgomery firm of breach of contract for allegedly failing to take actions seeking top-dollar compensation for the local victims in the bankruptcy case. He came up with the $619.3 million figure asserting the Avoca-area residents were entitled to $949 million but ended up receiving $329.7 million through the bankruptcy, his suit said.

PG&E Corp was unable to reach a deal with NextEra Energy Inc and other companies with which it has billions of dollars in in power contracts in a jurisdictional dispute over the bankrupt utility’s ability to walk away from or amend those agreements, according to court documents, Reuters reported. The matter will now be decided by the judge overseeing PG&E’s bankruptcy “in the coming weeks,” according to the documents filed in bankruptcy court on Friday. At issue is whether the bankruptcy court or the Federal Energy Regulatory Commission has jurisdiction over the power purchase contracts, which are worth up to $42 billion. San Francisco-based PG&E wants the matter resolved in bankruptcy court, while NextEra and others want FERC involved. FERC has said it has “concurrent jurisdiction” with the bankruptcy court in such matters. The contracts have emerged as one of the most contentious issues in PG&E’s bankruptcy, which the company launched in January in the face of tens of billions of dollars in potential liability stemming from wildfires in California in recent years that may be traced to its equipment. The question of what will happen to the power contracts is critical for California’s goal to source 60 percent of its power from sources of renewable energy by 2030. Most of the power contracts in question are for solar or wind resources to fulfill the state mandate.

A federal jury on Thursday found the top executives of Insys Therapeutics, a company that sold a fentanyl-based painkiller, guilty of racketeering charges in a rare criminal prosecution that blamed corporate officials for contributing to the nation’s opioid epidemic, the New York Times reported. The jury, after deliberating for 15 days, issued guilty verdicts against the company’s founder, the one-time billionaire John Kapoor, and four former executives, finding they had conspired to fuel sales of its highly potent drug, Subsys, by not only bribing doctors to prescribe their product but also by misleading insurers about patients’ need for the drug. Federal authorities last month for the first time filed felony drug trafficking charges against a major pharmaceutical distributor, Rochester Drug Cooperative, and two former executives, accusing them of shipping tens of millions of oxycodone pills and fentanyl products to pharmacies that were distributing drugs illegally. And the state attorneys general of Massachusetts and New York have recently sued not just Purdue Pharma, the maker of OxyContin, but also members of the Sackler family who own the company — and who have largely escaped personal legal penalties for the company’s role in the epidemic, culpability they deny. Also on Thursday, the state of West Virginia reached a $37 million settlement in a lawsuit against the McKesson Corporation, one of the nation’s leading drug distributors, which was accused of shipping nearly 100 million doses of opioids to residents over a six-year period. Experts said the Insys verdict could encourage other corporate prosecutions and said that it demonstrated that the public was willing to mete out penalties for high-level executives at companies profiting from the sales of highly addictive painkillers.

Thousands of residents in sprawling subdivisions west of Houston don’t just blame the historic rainfall for the losses they incurred during Harvey: They also fault the federal government, the Wall Street Journal reported. A trial starting today will test the legal claims of these residents and business owners who allege the U.S. Army Corps of Engineers knew homes were at risk of flooding and now, under eminent domain law, owes them compensation. The U.S. Justice Department, which is representing the government, has argued in court filings that the flooding was a one-time, temporary occurrence that doesn’t reach the necessary legal threshold for payment and that residents should have known they were living in an area vulnerable to flooding. The Army Corps built the Addicks and Barker dams west of Houston in the 1940s as part of a broader flood-management plan. Unlike some reservoirs, the areas only fill with water during heavy rainfall. Most days, the more than 25,000 acres is a serene expanse of grassy parkland, golf courses and sports fields. Residents of the neatly-pruned neighborhoods on the edge of the area say it was never clear to them their subdivisions were also part of a reservoir intended to hold water during severe storms.

PG&E Corp. said yesterday that the U.S. Securities and Exchange Commission is investigating the company regarding public disclosures and losses related to wildfires, Reuters reported. PG&E Corp said in a regulatory filing that it learned on March 20 that the SEC was investigating it in relation to its public disclosures and accounting for losses associated with the 2017 and 2018 Northern California wildfires and the 2015 Butte fire. PG&E, which provides electricity and natural gas to 16 million customers in northern and central California, faces widespread litigation, government investigations and liabilities that could potentially exceed $30 billion because of the fires in 2017 and 2018. The fire last November killed at least 86 people in the deadliest and most destructive blaze in California history. PG&E sought chapter 11 protection in January facing the prospect of, potentially, billions of dollars in liabilities linked or suspected to be linked to its equipment. Read more. 

In related news, PG&E Corp. spent $127 million on financing, legal and other fees in its first two months in bankruptcy, Bloomberg News reported. The California power giant expects chapter 11 costs for this year to range from $360 million to $430 million, according to a slide presentation posted online yesterday. The costs for the first quarter included $114 million in financing and $24 million in “legal and other costs,” offset by $11 million in interest income. The reported first-quarter profit was less than half the figure from a year earlier — net income was $136 million, or 25 cents a share, down from $442 million. Read more. 

The Diocese of Duluth has settled its bankruptcy case, which involved 125 people who were allegedly sexually abused as children by clergy and others in the diocese, KSTP.com reported. The diocese said yesterday that the plan will pay about $40 million to the 125 claimants. The diocese will also release files on 37 priests it has classified as credibly accused, and incorporate child protection protocols, the attorneys of the claimants said in a release. The plan anticipates contributions from the diocese itself and the 75 parishes in the diocese, as well as other Catholic entities, the diocese said. The majority of the settlement is expected to be funded by insurance carriers for the diocese. The plan will be presented to the U.S. Bankruptcy Court and is subject to its approval. The Diocese of Duluth filed for bankruptcy on Dec. 7, 2015.

PG&E Corp. yesterday sought court approval for a $105 million fund to help house victims of the wildfires blamed on the bankrupt California power provider, Reuters reported. PG&E in a filing in U.S. Bankruptcy Court in San Francisco said the fund would cover housing and other urgent needs for many who lost homes in the wildfires in 2017 and 2018. The biggest of the blazes, last year’s Camp Fire, killed more than 80 people and destroyed more than 14,600 housing units, with more than 11,300 lost in the town Paradise, according the California’s Department of Finance. The department said in a report yesterday that the Camp Fire displaced 83 percent of Paradise’s population, contributing to an increase of more than 19,000 people in the population of nearby Chico, which marked the largest numeric population change of any California city last year.

PG&E Corp.’s top finance executive said Monday that the company wants to set up a special fund that would be used in part to assist cash-strapped people displaced by the Camp Fire, the historic Butte County blaze the bankrupt company’s equipment is suspected of starting in November, the San Francisco Chronicle reported. Jason Wells, chief financial officer of the parent company of utility Pacific Gas and Electric Co., did not detail exactly how the fund would function but said PG&E is working with government officials to ensure it would not jeopardize any federal financial assistance provided to wildfire survivors. “We understand the impact the fire has had on so many individuals, and as soon as we complete these discussions with the governmental agencies, it is our intention to file that motion,” Wells said during a San Francisco meeting of creditors required as part of PG&E’s bankruptcy court proceedings. Wells told Gerald Singleton, one of the attorneys representing various wildfire victims, that PG&E “would have liked to have already filed this” but has to complete an analysis into whether it would conflict with aid that the Federal Emergency Management Agency gives to disaster victims.

A federal judge today granted the Archdiocese of Agana and its creditors' separate requests to hire additional lawyers and experts in connection with the church's ongoing reorganization bankruptcy filing, which would help pay more than 200 Guam clergy sex abuse claims, the Pacific Daily News reported. While the court vacates the hearing date on six matters, other matters will be taken up during the May 3 hearing, including the archdiocese's proposed Aug. 15 deadline to file clergy sex abuse claims and the proposed sale of the former Accion Hotel in Yona. The May 3 hearing will cover the archdiocese's proposed Aug. 15, 2019, bar date or deadline for filing clergy sex abuse claims and other proofs of claims. The archdiocese also intends to present testimony regarding its proposed $5.4 million sale of the former Accion Hotel and former seminary in Yona to TF Investment LLC. The church listed the property for $7.5 million in 2018. Creditors and plaintiffs' lawyers opposed the low sale price for the property, which was previously valued at not less than $11 million and two other canceled offers were at $6.5 million and $7.5 million. Bank of Guam, also an archdiocese creditor, filed an objection to the archdiocese's notice of intent to present testimony regarding the property sale, "on the grounds that insufficient notice of the appraisal is being given."