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FTX Group unveiled a draft creditor-repayment plan as part of its bankruptcy that calls for settling customer claims in cash and wiping out its digital token FTT, Bloomberg News reported. The plan — which FTX expects to amend based on feedback from stakeholders — proposes valuing customer claims in U.S. dollars as of the date it went bankrupt and repaying them by selling assets tied to various silos of the business, court papers show. FTX also still hasn’t ruled out rebooting an offshore exchange, according to the filings. Three so-called recovery pools will guide creditor repayments. They include assets linked to FTX.com customers, assets linked to FTX US customers and assets not clearly tied to the exchanges, court papers show. Almost every proposed creditor class is deemed impaired, meaning the company expects they will not be made whole. The plan calls for giving no recovery on account of FTT tokens due to their “equity-like characteristics,” advisers for FTX wrote in the filings. Equity is almost always wiped out in US bankruptcy reorganizations.

Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J.,threw out the second chapter 11 case that Johnson & Johnson filed to resolve its mass talc liabilities, again shutting down the healthcare-product company’s plan to achieve an $8.9 billion settlement, WSJ Pro Bankruptcy reported. Judge Kaplan said that J&J affiliate LTL Management LLC, created to carry the company’s talc-related liabilities into bankruptcy, wasn’t in sufficient financial distress to warrant granting it the legal protections of chapter 11. Friday’s ruling sets back J&J’s efforts to use the bankruptcy case to drive a settlement of mass claims alleging that its talcum-based baby powder caused cancer and contained asbestos, which the company denies. J&J said that it disagreed with the decision and would appeal. Outside of bankruptcy, J&J faces a tough road to resolving the talc litigation because of the large number of claims and the expectation that more talc users will sue for compensation in the future. In his ruling, Judge Kaplan cited a recent appeals court decision that threw out a prior bankruptcy case filed by LTL in 2021 to try to drive a settlement. A federal appeals court dismissed that chapter 11 case in January, but LTL filed for bankruptcy again in April, this time with a settlement offer supported by some plaintiffs’ law firms. That offer, valued at $8.9 billion, would rank among the largest tort settlements ever if accepted.

Bankrupt crypto companies FTX Trading Ltd. and Genesis Global Holdco LLC reached an in-principle agreement on resolving a dispute involving their chapter 11 cases, Bloomberg News reported. Collapsed exchange FTX had argued that it was owed as much as $3.9 billion by crypto lender Genesis, a contention that Genesis rejected. The sum was later reduced to up to $2 billion. Their legal representatives said in a Thursday letter to a bankruptcy judge that the two parties’ claims against each other would be settled by the agreement. They plan to file motions to bankruptcy courts for approval of the deal. The letter didn’t provide details about the settlement. The settlement would likely be a relief for many Genesis creditors, who expected the disagreement to delay bankruptcy proceedings and the eventual payout of claims.

The Roman Catholic Diocese of Syracuse and the Official Committee of Unsecured Creditors announced Thursday that they have reached a settlement agreement in the chapter 11 case filed in U.S. Bankruptcy Court in the Northern District of New York on June 19, 2020, CNYCentral.com reported. In 2020, there were more than 100 lawsuits filed against the diocese through the Child Victims Act, which allows victims to file civil lawsuits against abusers even if the statute of limitations has passed. The financial impact of the Child Victims Act and the economic downturn of the COVID-19 pandemic led to bankruptcy filing. The Diocese and the Committee believe that this settlement is an important first step in forming a plan that will lead to the Diocese's exit from bankruptcy. The settlement will provide payment in the amount of $100 million to all survivors of sexual abuse for acts perpetrated against them by clergy, religious, lay employees, and volunteers. Although the settlement amount remains subject to a creditor vote and court approval, the dollar figure of the settlement has been accepted by the Official Committee — comprised entirely of individuals who themselves survived sexual abuse when they were children by clergy members and employees within the Diocese of Syracuse.

Brad Heppner had the grand idea of bringing investment opportunities enjoyed by Wall Street institutions to small-fry investors. It brought misery instead, the Wall Street Journal reported. The Texas-based financial entrepreneur named his company Beneficient, a branding mashup of beneficial and beneficent, the quality of doing good. To bankroll his new venture, Heppner and his business partners merged it with GWG Holdings, an established financial-services firm that sold bonds to retail investors. GWG would raise the money. Beneficient would put it to work. Heppner served as board chairman of both companies and recruited a cast of notable directors, including two former Federal Reserve Bank presidents and legendary Dallas Cowboys quarterback Roger Staubach. From all appearances, Heppner and his team had a promising strategy: Beneficient would use money from GWG’s investor base to acquire stakes in private-equity funds and other highflying assets, giving rank-and-file investors access to markets typically off limits to them. The first funds from GWG to Beneficient, $50 million, landed in June 2019. As far as board directors were concerned, Beneficient would use the money to expand the business, former directors said. Instead, it kicked off what became one of the biggest financial blowups to strike retail investors in years. Within weeks, Tiffany Kice, Beneficient’s chief financial officer, discovered that millions of dollars went to payments for Heppner’s nearly 1,500-acre east Texas ranch and his personal travel via private jet. Kice, formerly an audit partner at KPMG and CFO of Chuck E. Cheese, also found that the company had been using a faulty accounting method that would misstate revenue.

Bill Hwang, the founder of Archegos Capital Management, on Thursday asked a judge to let him subpoena documents from 10 banks, in an effort to shift blame as he defends against criminal fraud charges that the firm's collapse was his fault, Reuters reported. In a filing in Manhattan federal court, Hwang said the documents will show that Archegos' counterparties "played a pivotal role" in the March 2021 collapse of his once-$36 billion firm, and that his swaps trades were legal. Hwang's request came three days after UBS agreed to pay $388 million in fines to U.S. and British regulators over poor risk management at Credit Suisse, which lost $5.5 billion when Archegos met its demise. UBS bought Credit Suisse last month, under pressure from Swiss regulators. Other banks also lost money when Archegos collapsed, but less than Credit Suisse.

FTX founder Sam Bankman-Fried will no longer face a campaign finance charge at an October criminal trial, federal prosecutors say, citing a decision by Bahamian authorities to reject a count in the indictment that was not listed on the warrant against him when he was extradited to the U.S. in December, the Associated Press reported. Prosecutors told U.S. District Judge Lewis A. Kaplan in a letter that the government in the Bahamas notified it on Wednesday that authorities there did not consider the charge to be included in Bankman-Fried's extradition. Thus, prosecutors wrote, they would not pursue it at the trial, in keeping with U.S. treaty obligations to the Bahamas. Bankman-Fried, 31, has been confined to his parent's Palo Alto, Calif., home as part of a $250 million bail package that prosecutors on Wednesday asked a judge to revoke. Prosecutors say his extensive contact with the news media demonstrates an effort to affect the jury pool. His lawyers deny it. The judge has imposed a gag rule while he decides the issue.

Twenty-two attorneys general urged a federal court Wednesday to reject a proposed $10.3 billion settlement over contamination of U.S. public drinking water systems with potentially dangerous chemicals, saying it lets manufacturer 3M Co. off too easily, the Associated Press reported. The deal announced in June doesn’t give individual water suppliers enough time to determine how much money they would get and whether it would cover their costs of removing the compounds known collectively as PFAS, said the officials with 19 states, Washington, D.C., and two territories. In some cases the agreement could shift liability from the company to providers, they said. “While I appreciate the effort that went into it, the proposed settlement in its current form does not adequately account for the pernicious damage that 3M has done in so many of our communities,” said California Attorney General Rob Bonta, leader of the multistate coalition. 3M spokesman Sean Lynch said the agreement “will benefit U.S.-based public water systems nationwide that provide drinking water to a vast majority of Americans” without further litigation.

A group of hedge funds is devising a plan to cut off about $1 billion meant to help victims of opioid addiction, opening the way to keep some of the money for themselves, the Wall Street Journal reported. Mallinckrodt, one of America’s largest manufacturers of opioids, last year agreed to pay $1.7 billion to resolve thousands of lawsuits brought by state and local governments and opioid-addicted individuals, who accused the company of helping cause a public-health crisis. The settlement funds, to be paid through 2030, were meant to help state health departments buy lifesaving overdose reversal drugs like Narcan and pay treatment costs for people who took prescription opioids. However, hedge funds that lent billions to Mallinckrodt are backing a plan for the company to get out of the deal with about $1.3 billion still unpaid. A group of hedge funds, including Greenwich, Conn.-based Silver Point Capital, is in negotiations with Mallinckrodt’s board to give them control of the business through a bankruptcy filing, according to people familiar with the discussions. Other hedge funds that hold the company’s debt, including Bracebridge Capital and Alta Fundamental Advisers, have been negotiating with Mallinckrodt over its potential plans to file for chapter 11, according to public filings.