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U.S. coal miner Arch Coal has agreed to set aside collateral to cover future mine cleanup costs as part of its bankruptcy reorganization plan, according to a court filing, ending its controversial use of "self-bonds,” Reuters reported yesterday. For decades the largest U.S. coal companies have used a federal subsidy known as "self-bonding," which exempts companies from posting bonds or other securities to cover the cost of returning mined land to its natural state, as required by law. Arch had $485.5 million in self-bonds in Wyoming when it filed for bankruptcy protection in January, saddled with $6 billion of debt and a deep slump in the coal sector. Under a reorganization plan set for a confirmation trial today in U.S. Bankruptcy Court in St. Louis, Arch must replace all of its self-bonds within 15 days of its bankruptcy exit plan becoming effective, a court filing by the company showed on Sunday.

A man who was clubbed by Vallejo police while trying to walk away from them in 2003 is entitled to $50,000 in damages plus legal fees, a federal appeals court ruled yesterday in rejecting officers’ arguments that the damages should be slashed because the city later filed for bankruptcy, the San Francisco Chronicle reported yesterday. Vallejo’s 2008 bankruptcy, California’s largest municipal insolvency in 15 years, left its creditors with only 20 to 30 cents for every dollar they were owed. But the U.S. Court of Appeals for the Ninth Circuit said that Jason Deocampo’s suit and the jury’s verdict were aimed at the officers who injured him, not the city that employed them. Deocampo was also awarded at least $400,000 for his legal fees, a sum that might increase by another $100,000 for costs of the appeal.

General Motors Co. said yesterday that it settled the last two so-called bellwether cases stemming from a faulty ignition switch linked to 124 deaths and 275 injuries, Reuters reported. The settlement came on the eve of what would have been the fourth in a series of test trials intended to help GM and plaintiffs define settlement options in 234 injury and death lawsuits consolidated in Manhattan federal court. One of the two cases, which had been set for a Sept. 12 trial, was filed by Virginia resident Stephanie Cockram, who sued GM over injuries she said she sustained in a June 28, 2011 single-vehicle crash while driving a 2006 Chevrolet Cobalt. Another trial over claims made by Kentucky resident Amy Norville, who crashed her Saturn Ion in 2013 seeking to avoid a deer on the road, was scheduled for later this year. Cockram's case would have been the fourth trial on the issue. The first was voluntarily dismissed by plaintiffs during the trial, and GM was cleared of liability in two others.

A Los Angeles jury on Wednesday said MetLife and two of its affiliates should pay $15.6 million to a woman who said she was swindled in a reported Ponzi scheme that had links to a MetLife insurance agent, the New York Times DealBook blog reported yesterday. The plaintiff, Christine Ramirez, a retiree, invested nearly $280,000 in the scheme, which lost $200 million for investors when it collapsed nearly a decade ago. Several of those investors sued MetLife, saying that the insurer had ignored or failed to notice signs that agents and brokers were peddling the investment to retirees and others. After an eight-week trial, the jury awarded Ramirez $10 million in punitive damages from MetLife Inc., $2.5 million in punitive damages from a MetLife subsidiary, New England Securities, and $2.5 million in punitive damages from a second subsidiary, the New England Life Insurance Company, along with $330,000 in punitive damages to be paid by a former managing partner. It awarded compensatory damages of more than $230,000 on Tuesday.

General Motors Co.’s victory in a Houston courtroom Thursday makes the carmaker three for three in trials related to an ignition-switch defect, but its legal entanglements may stretch on for years, Bloomberg News reported yesterday. At least a dozen lawsuits are set for trial in the next year, according to court records. The next trial begins Sept. 12 in New York federal court in a lawsuit over the 2011 crash of a Chevrolet Cobalt in Virginia. The company also faces lawsuits by car owners claiming economic losses because of the reduced value of their vehicles. In the Texas case, a jury of eight women and four men in state court took about an hour to reach its decision following a three-week trial. They determined that GM wasn’t liable for a 2011 accident that left Zach Stevens, then 19, with a brain injury after his 2007 Saturn Sky careened out of control on a rain-slick road and hit a pickup, killing the driver. In 2014, GM recalled 2.6 million U.S. cars with ignition switches in danger of jostling off. Once the switch came off, the cars lost power and safety systems such as power steering, power brakes, air bags and seat belts were prevented from working as designed. The defect has been linked to at least 124 deaths and 275 injuries. Read more.

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First National Bank of Omaha will pay more than $35 million in restitution and fines for deceptive marketing practices and illegal billing of add-on products, the Lincoln (Neb.) Journal Star reported today. The bank, the largest in Nebraska with $18.4 billion in assets, agreed to consent orders levied by the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, which were made public yesterday. The bank will pay a $3 million civil penalty to the OCC, a $4.5 million civil penalty to the CFPB and nearly $27.8 million in restitution to roughly 257,000 customers. The orders stem from First National's use of debt cancellation add-on products and credit-monitoring services between 1997 and 2012. According to the CFPB, First National disguised its sales tactics, failed to make it clear customers were purchasing a product, made it hard to cancel debt cancellation products and billed them for credit protection services they never received.

A group of sexual abuse victims who suffered at the hands of clergy in the Archdiocese of St. Paul and Minneapolis, Minn., have filed a counter-plan for the proposed settlement, the St. Paul Pioneer Press reported today. The archdiocese’s plan, submitted to bankruptcy court in May, is “grossly underfunded and grossly deficient,” said attorney Jeff Anderson during a news conference Tuesday. Anderson is a St. Paul attorney representing hundreds of people claiming sexual abuse by priests. The plan submitted by the survivors, as the Creditors’ Committee in the Archdiocese of St. Paul and Minneapolis, would require the archdiocese to pay $80 million to victims instead of the $13 million it proposed. Read more. 

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The Securities and Exchange Commission has filed a $1.2 million claim in SandRidge Energy Inc.'s bankruptcy case relating the company's firing of a whistleblower who alleged the company had inflated its oil and natural gas reserves, the Oklahoman reported today. The claim comes as the SEC has announced several fines of companies that have run afoul of federal securities regulations that protect whistleblowers. SandRidge, which first disclosed the investigation in securities filings earlier this year, provided more information in a quarterly filing on Monday. The company said that it is cooperating with the investigation. The audit committee of the company's board of directors has hired an independent law firm to look into the former employee's allegations.

Bankrupt coal company Peabody Energy won U.S. court approval yesterday for agreements with three states to partially cover $1.14 billion in potential environmental liabilities and for a bonus plan for its six top executives, Reuters reported yesterday. Under the agreements, Wyoming can receive $127 million in cash if Peabody walks away from its mine cleanup obligations in the state while in bankruptcy, while New Mexico would receive $32 million and Indiana would get $17 million. Until now those liabilities were covered by a federal program known as self-bonding. It allows the largest miners to extract coal without setting aside cash or collateral. The program is currently under review. Peabody's agreements with Wyoming, New Mexico and Indiana are similar to deals reached by bankrupt coal miners Arch Coal and Alpha Natural Resources on self-bonds in Wyoming and West Virginia. Peabody also overcame objections by funds affiliated with the United Mine Workers of America to its executive bonus plan. The plan and another incentive plan for non-insider employees proposed setting aside up to $16.2 million in bonuses.