%1

The Archdiocese of Santa Fe, N.M., announced yesterday that it will file for chapter 11 reorganization, CNA.com reported. At a press conference Nov. 29, Archbishop John Wester said that filing for bankruptcy is an equitable way to meet its responsibility to sexual abuse victims. Wester said there are between 35-40 active claims against the archdiocese, which is comprised of more than 300,000 Catholics in northwestern New Mexico. The announcement came the day after New Mexico’s attorney general executed a search warrant on the archdiocesan chancery office in Albuquerque. The attorney general was seeking files related to two priests accused of sexual abuse, Marvin Archuleta and Sabine Griego.

Thousands of victims of Bernard Madoff’s Ponzi scheme are due to get checks totaling $695 million from a U.S. Justice Department fund created through settlements with some of the con man’s oldest customers and his bank, JPMorgan Chase & Co., Bloomberg News reported. The payout, to 27,000 victims worldwide, is the third distribution from the $4 billion fund, the department said Thursday in a statement. The government-led recovery is separate from a $13.3 billion fund overseen by a trustee who’s been liquidating Madoff’s firm in court for the past 10 years to compensate people he duped. Madoff’s investors lost a total of $19 billion in principal and more than $40 billion in fake profit when his securities firm collapsed in December 2008. Federal prosecutors called it the biggest Ponzi scheme in history. Madoff, 80, was sentenced to 150 years behind bars after pleading guilty in 2009.

A bankruptcy judge denied Harvey Weinstein’s request for permission to identify the senders of a set of emails he says would aid his defense against criminal charges, WSJ Pro Bankruptcy reported. The email issue arose in bankruptcy court because the computer servers on which they are stored are the property of Weinstein Co., Weinstein’s former entertainment studio, which filed for chapter 11 after several women publicly accused him of sexual assault. “I’m not going to let you use the actual names,” Bankruptcy Judge Mary Walrath told Weinstein’s lawyer yesterday. She also ordered him to notify lawyers representing the women who sent the emails that Weinstein plans to use them. Read more. 

Don't miss the ABI Talk "#MeToo: Where I've Been, and Where Bankruptcy Professionals Are Going" by Cathy R. Herschcopf of Cooley LLP at the 2018 Winter Leadership Conference. Click here to register. 

PG&E Corp., suspected of starting California’s deadliest wildfire, may soon get help from state lawmakers, but not the help it most wants, Bloomberg News reported. An assemblymember plans to introduce a bill in January that would give the state’s largest utility owner a way to pay off billions of dollars in potential liabilities it faces from the Camp Fire, the deadliest in state history. But lawmakers appear unlikely to give PG&E and the state’s other utilities the relief they have sought for a year: a change to rules that automatically hold the companies responsible for any fire damage tied to their equipment. PG&E shares have plunged almost 50 percent since the start of the Camp Fire, which killed at least 85 people and torched more than 13,600 homes. The stock has stabilized after news of Holden’s bill, first reported by Bloomberg, and comments by the state’s utility regulator that it doesn’t want the company to go into bankruptcy.

Troubled utility SCANA has reached a $2 billion settlement with the South Carolina customers who sued after they were charged high rates to pay for the company’s failed nuclear construction project, the Associated Press reported. SCANA announced the agreement on Saturday. As part of the settlement, South Carolina Electric & Gas Co. customers will also receive $115 million that <em>The State</em> newspaper reports had been set aside for soon-to-be-ousted SCANA executives. Before the settlement can be finalized, it must receive the approval of a judge and the S.C. Public Service Commission must also approve Virginia-based Dominion Energy’s proposed buyout of SCANA, SCE&G’s parent company. Santee Cooper and South Carolina Electric & Gas Co. abandoned the V.C. Summer Nuclear Station expansion project near Columbia in 2017 following the bankruptcy of lead contractor Westinghouse.

The Catholic Diocese of Winona-Rochester (Minn.) will file for chapter 11 protection by the end of the month following multiple claims of clergy sex abuse, MyFOX47.com reported. The Diocese is facing 121 pending claims of clergy sex abuse by 14 priests who have been credibly accused of sexual misconduct with children from the 1960s through the 1980s. The Diocese of Winona-Rochester ministers 117 parishes in southern Minnesota.

PG&E Corp. rallied as much as 49 percent in extended trading yesterday after the head of the California Public Utilities Commission said he can’t imagine allowing the state’s largest utility to go into bankruptcy as it faces billions of dollars in potential liability from deadly wildfires, Bloomberg News reported. “It’s not good policy to have utilities unable to finance the services and infrastructure the state of California needs,” PUC President Michael Picker said. “They have to have stability and economic support to get the dollars they need right now.” The end-of-day rally reversed hours of frantic selling, in which the utility fell the most since 2001, during the depths of the California power crisis. PG&E shares had plummeted 64 percent since Nov. 7 amid fears that it would be held liable for a catastrophic wildfire that has killed more than 50 people, destroyed thousands of homes and scorched over 140,000 acres.

Any PG&E Corp. bankruptcy filing could come down to a fight between bondholders who lent the company money and property owners whose homes were scorched by wildfires, according to a Bloomberg commentary. The utility company has $18 billion of bonds that are unsecured, meaning the debt would have equal priority to get repaid in a bankruptcy as the roughly $30 billion in potential liabilities that analysts have estimated from 2017 and 2018 California wildfires. PG&E recently completely drew down its credit lines. The company hasn’t said that it plans to file for bankruptcy, and is still rated investment grade. But some analysts say that it may have to eventually reorganize under court protection to clear its fire-linked liabilities. There is a trick that PG&E could use to improve investors’ status in bankruptcy, according to Andy DeVries, a CreditSights analyst. If PG&E were to take on at least $5 billion of new debt secured by PG&E’s assets, rules governing the existing bonds state that the unsecured notes would also become secured, he said. “It’s an odd situation where the bondholders might want the company to issue more secured debt if it puts them ahead potentially of wildfire claims,” DeVries said. Read more. 

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Archbishop Michael Jude Byrnes announced today that the Archdiocese of Agana will file for bankruptcy to help settle nearly 200 clergy sex abuse claims by former altar boys, the Pacific Daily News reported. The chapter 11 filing is expected to be filed by mid-December to mid-January. It proposes a plan for the archdiocese to reorganize and pay its creditors most especially those who brought claims of child sexual abuse. The Archdiocese of Agana is the 20th Catholic diocese in the United States to file for bankruptcy, since 1994, to help settle clergy sex abuse claims, according to North Idaho-based bankruptcy Attorney Ford Elsaesser, who was tapped by the archdiocese to help in the process. He said there had not been substantial disruption in the mission of the church, their schools and other Catholic community activities for these diocese that filed for chapter 11 bankruptcy. Elsaesser said once the Archdiocese of Agana files for bankruptcy, there will be a "bar date period," which takes four to five months or up to about May 2019, for additional clergy sex abuse claims to be filed.

Justice Department officials are protesting a bankruptcy judge’s recent decision to allow New Jersey manufacturer Duro Dyne National Corp. hire a lawyer fight for a pool of money that would compensate people who were exposed to asbestos but have yet to become ill, WSJ Pro Bankruptcy reported. DOJ lawyers appealed the bankruptcy court ruling on Wednesday, putting the issue before another federal judge for review. They previously warned Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., that the company-selected candidate to represent future asbestos-exposure claimants might not fight aggressively enough for those people. The candidate, lawyer Lawrence Fitzpatrick, was recommended by attorneys for Duro Dyne, a Hamilton, N.J.,-based manufacturer of sheet metal accessories that filed for bankruptcy in September facing nearly 1,000 personal-injury lawsuits related to asbestos exposure.