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Bankrupt cryptocurrency lender Genesis Global Holdco LLC sued its parent, Digital Currency Group, seeking to recover about $620 million in outstanding loans despite ongoing settlement talks, Bloomberg News reported. Genesis sued Barry Silbert’s DCG and DCG International Investments Ltd. on Wednesday in New York bankruptcy court but asserted that the companies will keep discussing a potential deal that could end the dispute. The lawsuits were filed after Genesis unveiled a $1.4 billion debt repayment plan backed by some of its customers but which isn’t supported by other key creditors. “Genesis has agreed to stay the turnover action so that we can move forward with documenting the deal in principle that was reached with Genesis, the UCC, and DCG,” a spokesperson for DCG said in an emailed statement. DCG will begin repaying the loans after a standstill agreement is filed with the bankruptcy court, the spokesperson said. The lawsuits concern loans to DCG that Genesis says matured in May. The outstanding debt includes a $500 million loan to DCG and loan to DCGI comprised of about 4,550 Bitcoin, according to the lawsuits. Genesis is also seeking to recover accrued interest and late fees.

Opponents of the Boy Scouts of America’s plan for a $2.4 billion sex-abuse settlement recently found fresh legal ammunition when the Supreme Court agreed to examine a similar plan drawn up by Purdue Pharma, WSJ Pro Bankruptcy reported. Some of the Boy Scouts’ insurers and a small group of sex-abuse victims have renewed calls in federal court to temporarily block the youth group’s chapter 11 plan, saying it shouldn’t advance any further until the Supreme Court weighs in on Purdue’s plan for mass opioid liabilities. Their attempt is the latest example of how the Supreme Court’s decision to hear a challenge to Purdue’s chapter 11 plan is rippling through the bankruptcy system. The Supreme Court last month said it would examine whether bankruptcy law can be used to resolve creditors claims’ against third parties that aren’t in chapter 11 without the consent of all claimants. Such releases are central to the bankruptcy plans crafted by both the Boy Scouts and Purdue. Purdue’s plan would release its Sackler family owners from opioid-related liabilities in return for up to $6 billion in settlement payments. In the Boys Scouts’ plan, local councils and partner organizations of the organization would be shielded from the claims of the sex-abuse claimants. In court papers filed Friday, the Boy Scouts argued that, unlike the Purdue case, the youth group’s plan can’t be halted as the wheels are already in motion to collect the settlement funds and distribute them to plaintiffs.

FTX Group advisers have scrutinized whether they can claw back millions of dollars paid to Shaquille O’Neal, tennis star Naomi Osaka and other professional athletes and teams that promoted Sam Bankman-Fried’s crypto platform before its collapse, Bloomberg News reported. Financial advisers hired by FTX disclosed in court papers that they’ve analyzed if certain payments dished out to athletes before the company unraveled last November can be recovered in chapter 11. Advisers have reviewed payments to O’Neal, Osaka and others to determine if the transfers are subject to rules that permit companies to reverse transactions that occurred just before a chapter 11 filing, according to court documents. While not a complete accounting of FTX’s spending on endorsements, the new disclosures likely offer the fullest glimpse to date into how Bankman-Fried’s empire elevated its profile using the fame of celebrity athletes, Major League Baseball, National Basketball Association teams and Formula 1. Whether FTX advisers believe all of the payments can be recovered, or if any athletes or teams have already offered to return payments, couldn’t be learned. FTX’s disclosures describe many of the transfers to athletes, teams and leagues as prepayments related to advertising or sponsorship deals. FTX cautioned the financial disclosures may not be complete because the company lacked “detailed historical amortization information” and could be further amended in the future. New FTX Chief Executive Officer John J. Ray III said when the company filed chapter 11, the company lacked trustworthy financial information and didn’t keep complete books and records.

One of the nation's largest grocery chains is the latest company to agree to settle lawsuits over the U.S. opioid crisis, the Associated Press reported. In a deal announced on Friday, the Kroger Co. would pay up to $1.4 billion over 11 years. The amount includes up to $1.2 billion for state and local governments where it operates, $36 million to Native American tribes and about $177 million to cover lawyers' fees and costs. Kroger currently has stores in 35 states — virtually everywhere save the Northeast, the northern plains and Hawaii. Thirty-three states would be eligible for money in the deal. The company previously announced settlements with New Mexico and West Virginia. Over the past eight years, prescription drug manufacturers, wholesalers, consultants and pharmacies have proposed or finalized opioid settlements totaling more than $50 billion, including at least 12 others worth more than $1 billion. The U.S. Supreme Court is set to hear arguments later this year on whether one of the larger settlements, involving OxyContin maker Purdue Pharma, is legal.

Former FTX executive Ryan Salame pleaded guilty Thursday in New York federal court to campaign finance and money-transmitting crimes, and agreed to forfeit more than $1.5 billion, CNBC.com reported. Salame, who was released on a $1 million bond, faces a maximum possible sentence of 10 years in prison. His sentencing was scheduled for March 6. In addition to the monetary forfeiture, which will be paid to the U.S. government, the 30-year-old Salame will pay $5 million to debtors of FTX. A source told CNBC that Salame is not cooperating with federal prosecutors, who are preparing for the criminal fraud trial of former FTX chief Sam Bankman-Fried.

Sam Bankman-Fried yesterday lost his bid to be freed immediately from a Brooklyn jail so he could prepare better for his criminal trial, less than a month away, over the collapse of his FTX cryptocurrency exchange, Reuters reported. In rejecting Bankman-Fried's request, the U.S. Court of Appeals for the Second Circuit in Manhattan nonetheless said that it would ask the next available three-judge panel to consider it. U.S. District Judge Lewis Kaplan on Aug. 11 revoked Bankman-Fried's $250 million bail after finding that the former billionaire likely tampered with witnesses at least twice. Bankman-Fried quickly appealed, arguing he would be unable to properly prepare for his scheduled Oct. 3 trial from behind bars. Prosecutors say Bankman-Fried stole billions in FTX customer funds to plug losses at Alameda Research, his hedge fund.

The collapse in cryptocurrency prices last year forced a procession of major firms into bankruptcy, triggering a government crackdown and erasing the savings of millions of inexperienced investors. But for a small group of corporate turnaround specialists, crypto’s implosion has become a financial bonanza, the New York Times reported. Lawyers, accountants, consultants, cryptocurrency analysts and other professionals have racked up more than $700 million in fees since last year from the bankruptcies of five major crypto firms, including the digital currency exchange FTX, according to a New York Times analysis of court records. That sum is likely to grow significantly as the cases unfold over the coming months. Large fees are common in corporate bankruptcies, which require complex and time-intensive legal work to untangle. But in the crypto world, the mounting fees have sparked widespread outrage because many of the people owed money are amateur traders who lost their personal savings, rather than corporations with the ability to weather a financial crisis. Lawyers and other bankruptcy professionals argue that they are charging market rates for difficult work that will ultimately help recover the money that crypto investors lost. In the FTX case, Sullivan & Cromwell has said that it has scraped together more than $7 billion in assets, though it’s unclear how much of that total will go back to creditors. A spokesman for FTX’s new management said the bankruptcy was “extraordinary in almost every conceivable way,” requiring professionals to recreate records from scratch and track down missing funds. Andrew Dietderich, a partner at Sullivan & Cromwell, said in a statement that the lack of clear crypto regulations made the cases more complex and time-consuming, driving up costs.

The Baltimore Archdiocese is considering filing for bankruptcy as it anticipates a potential flood of lawsuits starting Oct. 1, when a new Maryland law will lift the statute of limitations on claims from those who say they were sexually abused as children, according to internal emails among church officials and a communications specialist, the Baltimore Sun reported. While many have expected the nation’s oldest archdiocese might file for bankruptcy as dioceses in other states have done in the face of child sex abuse lawsuits, an email chain obtained by the Baltimore Sun confirms this is an option under consideration. “I would suggest reverting back to the plan of not ‘announcing’ until the time of filing, and only confirming, if the media picks up on our internal conversations, that we are sharing information about the upcoming law change,” wrote Sean T. Caine of Caine Communications on Friday, “what it means, how it might impact the various agencies of the Church, and how the Church may respond. “The issue of bankruptcy was raised among many optional responses,” he wrote. Asked about a potential bankruptcy, Christian Kendzierski, the spokesman for the archdiocese, said in an emailed statement that officials are “preparing for the impact of the new law” and “considering how to best respond to it.

3M Co.’s $6 billion settlement of lawsuits accusing the company of selling defective combat earplugs to the U.S. military could fall apart if enough veterans reject the deal as inadequate for their injuries, Bloomberg News reported. Given 250,000 or so active claims of hearing loss 3M has identified, the accord works out to about $24,000 a head, and would be even less after court costs and legal fees. That may not be enough to make up for the life-altering injuries service members say they suffered after the earplugs failed to protect them from the roar of heavy artillery and tanks. 3M itself can walk away from the pact if it doesn’t get the support of at least 98% of claimants eligible for compensation. But that would force the company back to the negotiating table and leave it facing hundreds of thousands of lawsuits and a formidable array of jury trials — the very outcome it sought to avoid by striking the deal. Under the terms of the settlement, which Bloomberg reported Sunday and 3M announced Tuesday, the plaintiffs will have about six months to decide whether to accept a payout under the accord, opt out of the deal to demand a trial, or drop their suit, according to court filings. The lawsuits have been consolidated in a multi-district litigation case in federal court in Pensacola, Florida — one of the biggest MDLs in U.S. history.

Drugmaker Mallinckrodt's opioid creditors will support an expedited second bankruptcy, despite a "gruesome" $1 billion reduction in settlement money for victims of the U.S. opioid crisis, attorneys said yesterday, Reuters reported. Mallinckrodt, which makes both branded and generic drugs, filed for its second bankruptcy on Monday after previously emerging from chapter 11 in June 2022. The company blamed higher interest rates on its debt, upcoming opioid settlement payments, and reduced sales for blockbuster drugs like its Acthar gel treatment for multiple sclerosis and infantile spasms. Mallinckrodt's second restructuring, which would wipe out existing equity shares, will reduce the company's debt by $1.9 billion. It will also trim $1 billion from its previously agreed opioid settlement, which resolved about 3,000 lawsuits alleging that the company used deceptive marketing tactics to boost generic opioid sales. The restructuring agreement has the support of over 90% of its lenders and the trustees in charge of the opioid settlement funds, attorneys said at a hearing yesterday in the U.S. Bankruptcy Court for the District of Delaware. David Molton, an attorney for the opioid trust, said that losing $1 billion in settlement money was a "particularly gruesome" result for states, local governments, individual victims and others who would have benefited from the settlement money. Those creditors will receive just $700 million after Mallinckrodt agreed to an up-front of $250 million payment just before its second bankruptcy. Molton told U.S. Bankruptcy Judge John Dorsey that none of the opioid victims were happy with the deal.