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Bitcoin miner Core Scientific Inc. accused bankrupt crypto lender Celsius Network LLC of refusing to pay its bills since filing for chapter 11, threatening the data-hosting company’s own financial health, WSJ Pro Bankruptcy reported. The brewing dispute could have a material impact on Core Scientific, one of the largest publicly traded crypto miners, as the massive data centers that host bitcoin mining operations struggle to weather the cryptomarket downturn that dragged Celsius and other crypto firms into bankruptcy. Celsius, which filed for chapter 11 in July, has said in court filings that Core broke its service contract by delaying the deployment of mining rigs delivered to Core and supplying less power to those rigs than required under their contract. Celsius has asked for a court order holding Core in contempt and to compel the hosting services provider to perform. Core in response has asked the court to compel Celsius to pay past-due bills to Core or else allow it to sever its contract with Celsius. "Celsius either needs to adhere to the contract, or Core and Celsius must terminate their relationship before Celsius causes yet another business partner to enter insolvency proceedings,” Core Scientific said in bankruptcy court papers filed on Wednesday. Core and other crypto miners have faced major financial challenges this year as power prices surged, crypto prices crashed and major crypto projects and companies have been wiped out. Core shares have tumbled from over $10 per share at the start of the year to just over $1. In court papers filed on Wednesday, Core said Celsius is attempting to “foist millions of dollars in increased power costs on to Core’s balance sheet.” Core also argued that its contract requires Celsius to cover the higher tariffs currently being charged by utilities.

The Justice Department’s bankruptcy watchdog wants Kirkland & Ellis LLP removed as counsel to 3M Co.’s bankrupt earplug manufacturing unit, saying the law firm has a conflict because it also is defending the parent company in mass earplug lawsuits, WSJ Pro Bankruptcy reported. Kirkland & Ellis doesn’t possess “undivided loyalty” to its client, 3M subsidiary Aearo Technologies LLC, according to court papers filed by the Office of the U.S. Trustee on Thursday objecting to the firm’s retention. The U.S. Trustee said that Kirkland can’t be loyal to Aearo because its bankruptcy process is being financed by 3M, which the firm also represents in roughly 230,000 personal-injury lawsuits pending against the company in federal court in Pensacola, Fla. 3M placed Aearo under chapter 11 protection in July in the U.S. Bankruptcy Court in Indianapolis, hoping to move the earplug lawsuits against the subsidiary and its solvent parent out of the tort system. Aearo’s chief restructuring officer said in court papers in August that Kirkland is well qualified and uniquely able to represent Aearo in chapter 11 because of its familiarity with the company’s business and potential legal issues that might arise in bankruptcy. The bankruptcy depends on 3M’s commitment to provide unlimited funding toward resolving the earplug litigation in return for a full release from liability. As counsel to Aearo, Kirkland has a fiduciary duty to maximize 3M’s contribution — and by implication to maximize 3M’s share of their combined tort liability, the U.S. Trustee said yesterday.

An insurer on Monday lost its fight to dismiss the bankruptcy of Imerys Talc America Inc., which sought protection from creditors three years ago, the Wall Street Journal reported. The Manchester, N.H.-based RiverStone insurers said Imerys sold all of its mining operations in early 2021, leaving the company with virtually no business. The insurance company said Imerys has no valid reorganization prospects and that its bankruptcy should be thrown out for bad faith. Imerys filed for bankruptcy in 2019 over more than 14,000 personal-injury claims mostly related to talc it mined that supplied Johnson & Johnson’s baby-powder products, which allegedly cause cancer. Judge Laurie Selber Silverstein in the U.S. Bankruptcy Court of Wilmington, Del., denied the insurer’s request to dismiss the bankruptcy on Monday. The judge said the insurer failed to show that it is in any immediate harm since Imerys doesn’t currently have a bankruptcy plan before the court. The judge said that RiverStone isn’t currently a creditor, but she left it open for the insurer to raise any harm from a future plan. Last year, Judge Silverstein ruled to disqualify decisive ballots cast in favor of a cancer-victim compensation plan, saying that most of the asbestos-injury clients represented by one law firm had no basis to vote.

The nearly $1 billion in damages a jury ordered Alex Jones and his Infowars company to pay for defaming the families of eight Sandy Hook victims this week was an overwhelming victory in the families’ quest for accountability. But the fight for the money has only begun, the New York Times reported. Lawyers for the families started early Thursday to navigate what promises to be a circuitous path to delivering as much as possible of the $965 million verdict, plus court costs, to the families. There is also the $50 million awarded to two other Sandy Hook parents in a trial this past summer, and damages yet to be assessed in an upcoming third and final trial this year. “We are going to chase Alex Jones to the ends of the earth,” for “every last dollar,” Josh Koskoff, one of the lawyers for the 15 Connecticut plaintiffs, said Thursday. The group includes eight victims’ families and an FBI agent implicated in the bogus Sandy Hook theories spread by Jones, who for years said that the 2012 shooting that killed 20 first graders and six educators at Sandy Hook Elementary in Newtown, Connecticut, was a government hoax and that the families were actors in the plot. But experts said that Wednesday’s verdict was so staggering as to be largely symbolic, since Jones’ empire is likely worth a maximum of $270 million, according to a forensic economist who had testified in the earlier trial.

A federal appeals court granted 3M Co.’s request to review a bankruptcy judge’s refusal to stop mass injury lawsuits from proceeding against the conglomerate following the chapter 11 filing of its earplug manufacturing unit, Aearo Technologies LLC, WSJ Pro Bankruptcy reported. The U.S. Court of Appeals for the Seventh Circuit in Chicago on Wednesday granted Aearo’s petition requesting a direct review of the bankruptcy court ruling, bypassing a federal district court and putting the appeal on a faster track to resolution. The appeal stems from an August ruling by Judge Jeffrey Graham of the U.S. Bankruptcy Court in Indianapolis, who declined to shield 3M from continued litigation involving military earplugs and extending to it the litigation stay that Aearo received automatically by filing for chapter 11. The bankruptcy ruling has allowed 230,000 personal-injury claims against 3M, which didn’t seek chapter 11 protection itself, to continue proceeding on behalf of U.S. military veterans who allege the earplugs didn’t work as promised and left them with lasting hearing damage. The claimants blame faulty earplug design for their alleged injuries, while 3M says the earplugs are safe when used properly. 3M has argued that chapter 11 provides all claimants with an equitable resolution, and pays them more quickly and efficiently than the tort system. Personal-injury lawyers have fought to keep the earplug lawsuits out of bankruptcy court and accused 3M of misusing chapter 11 to escape mass lawsuits it was losing.

A Connecticut jury ordered Infowars founder Alex Jones to pay $965 million in damages to the families of eight victims of the Sandy Hook shooting for the suffering caused by years of lies that the massacre was a hoax, the Washington Post reported. Yesterday’s verdict marks the largest award to date in a multi-pronged legal battle by the families to hold Jones responsible for circulating falsehoods about the 2012 mass shooting, in which 20 children and six educators were killed in an elementary school in Newtown, Conn. Within hours of the shooting, Jones was telling his audience that it was staged as a pretext for confiscating guns. Within days, he began to suggest that grieving parents were actors. In the years that followed, he repeatedly said the massacre was faked. The families testified during the trial that the lies spread by Jones led to harassment and threats by conspiracy theorists who have accused them of faking their own children’s deaths. They described feeling unsafe in their homes and hypervigilant in public. Some of the families moved away from Newtown. The largest single award of $120 million went to Robbie Parker, whose 6-year-old daughter, Emilie, was killed in the shooting. Jones spent years mocking Parker as an actor. The plaintiffs also included an FBI agent who responded to the shooting. He was awarded $90 million in damages. Read more.

In related news, Alex Jones will join his bankrupt production company in court-supervised settlement talks with families of Sandy Hook school shooting victims, Bloomberg News reported. Jones has agreed to participate in the talks, his lawyer, Shelby A. Jordan, said in a federal court hearing in Houston on Wednesday. The mediation will move forward in the coming weeks while a bankruptcy trustee investigates Jones’ bankrupt company, Free Speech Systems, and its finances, lawyers said in court. FSS filed bankruptcy in July in the second attempt this year by companies controlled by Jones to force Sandy Hook families that have won court victories against him to resolve their cases in bankruptcy. Last month, Bankruptcy Judge Christopher M. Lopez expanded the powers of the trustee overseeing the FSS bankruptcy case, and ordered an investigation of the company. Read more.

Thirty-five Child Victims Act lawsuits against the Catholic Diocese of Buffalo, N.Y., may end up getting settled in federal bankruptcy court – albeit through the Boy Scouts of America’s chapter 11 plan, not the diocese’s own bankruptcy process, the Buffalo News reported. Lawyers for the diocese have asked Chief Judge Carl L. Bucki of the U.S. Bankruptcy Court for the Western District of New York to let the diocese “opt in” to the Boy Scout settlement plan that was approved in September. If approved, the move would allow the diocese to shift 35 childhood sex l-abuse claims – a small fraction of the more than 900 claims filed against it – onto a $2.46 billion settlement trust in the Boy Scouts bankruptcy case. The diocese would transfer to the trust its insurance coverage rights under Boy Scouts of America policies. The diocese also would be granted “limited protected party” status, whereby any scouting-related abuse litigation would be on hold for at least 12 months while the diocese negotiated an “appropriate contribution” with the settlement trust. Channeling the 35 claims to the trust would “result in the availability of additional funds for distribution to other abuse claimants in the diocese bankruptcy case,” Richard C. Suchan, chief operating officer for the diocese, said in court papers filed last week.

The Archdiocese of Santa Fe yesterday filed its long-awaited plan of bankruptcy reorganization to compensate nearly 400 clergy abuse survivors with more than $121 million, with an additional $4 million promised by the Servants of the Paraclete, which ran a national treatment center that funneled dozens of offenders into New Mexico Catholic parishes and schools, the Albuquerque Journal reported. Six insurers will pay $46.5 million of the $121.5 million negotiated amount, with the remaining $75 million contribution by the archdiocese, which has put more than $69 million into an escrow account, with a $5.4 million promissory note that must be paid in full by March 31. In addition, the Paraclete and three religious orders that have been sued in state court for clergy abuse will contribute an additional $7.85 million. The archdiocese’s contribution is considered to be among the largest settlements paid by an archdiocese in the country. The plan comes nearly four years after the archdiocese filed for bankruptcy reorganization to try to resolve mounting abuse claims and stem financial losses that date back to the early 1990s. At the time, the archdiocese was facing about 36 lawsuits.

A federal bankruptcy judge in New Orleans leveled a $400,000 penalty yesterday against a lawyer for clergy abuse survivors who allegedly revealed protected information about a priest to a Catholic school principal and a news reporter, NOLA.com reported. Bankruptcy Judge Meredith Grabill issued the sanctions against attorney Richard Trahant in a 30-page order, claiming he wrongfully disclosed information from discovery materials handed over in December in the Archdiocese of New Orleans' bankruptcy case. The information related to the Rev. Paul Hart, then chaplain at Brother Martin High School. Hart left his post in early January, days after the school was notified of allegations from 1990 that he kissed and fondled a Mount Carmel Academy senior while serving at another local Catholic institution. It wasn’t the embattled archdiocese that first alerted the school, however. Trahant admitted that he called the school principal, who is a cousin, after learning of the allegations involving Hart, who was not identified on the archdiocese's public list of credibly accused priests. Trahant also admitted he alerted a reporter for The Advocate to Hart's identity. Trahant insisted that he didn’t reveal any confidential documents, but admitted he “planted that seed” to expose Hart. He has argued that he didn’t violate the court’s protective order at all. “In no uncertain terms, I did what I did to protect children. I provided no documents. I read no documents to anyone,” Trahant said yesterday, adding that he would appeal the sanctions. Judge Grabill, however, found that his actions violated the protective order and caused harm, including “hurt and trauma revisited upon the survivor of the priest’s alleged abuse.” The judge also cited Trahant for failing to promptly come clean, resulting in a costly investigation by the U.S. Trustee.

A Connecticut jury resumed deliberations on Tuesday in a trial to determine how much conspiracy theorist Alex Jones must pay families of victims of the 2012 Sandy Hook mass shooting for falsely claiming that the massacre was a hoax, Reuters reported. Closing arguments concluded on Thursday in Waterbury, Conn., not far from where a gunman killed 20 small children and six staff members at Sandy Hook Elementary School in December 2012. Jurors deliberated all day on Friday but did not meet on Monday due to the federal holiday. Jones claimed for years that the massacre was staged by the government as part of a plot to take away Americans' guns. In August, another jury found that Jones and his company must pay $49.3 million to Sandy Hook parents in a similar case in Austin, Texas, where his Infowars website is based. Lawyers for the families of eight Sandy Hook victims in the Connecticut case said Jones and his company, Free Speech Systems LLC, cashed in for years on lies about the shooting, which drove traffic to Infowars and sales of products there. The trial was marked by weeks of anguished testimony from the families, who filled the gallery each day and took turns recounting how Jones’s lies about Sandy Hook compounded their grief. An FBI agent who responded to the shooting is also a plaintiff in the case.