%1

The Roman Catholic Diocese of Rochester (N.Y.) has put forward a $147.75 million offer to settle claims filed by 475 sexual-abuse survivors in the diocese’s chapter 11 bankruptcy, the Rochester Beacon reported. Whether the nine-figure offer will bring a quick end to the long-stalled bankruptcy at this point seems far from certain. The offer was outlined in a filing posted with the bankruptcy court late Friday afternoon. In court papers, the diocese portrays the offer as a deal that would best serve the abuse victims “by achieving certainty with respect to a very substantial insurance contribution rather than risking the cost, extensive delay, and uncertain outcome of litigation in pursuit of the theoretical possibility of a larger recovery at some point in the distant future.” The Rochester diocese filed bankruptcy in September 2019, roughly a month after the New York Child Victims Act went into effect. Signed into law in February of that year, the CVA temporarily lifted a seven-year statute of limitations on sexual-abuse claims. That opened a roughly two-year window for adults who had been sexually abused as children decades ago and failed to press claims then to go after their alleged abusers. Under the CVA, more than 300 individuals have filed state court complaints accusing Rochester diocese priests and other church officials. Four hundred seventy-five people have filed claims seeking compensation for alleged sexual abuse in the Rochester diocese’s chapter 11. Terms proposed by the diocese’s settlement offer would see its insurance carriers contribute $107.25 million to a fund to pay abuse survivors. The diocese and its parishes would contribute $40.5 million to the fund.

The United States is objecting to a Johnson & Johnson subsidiary’s bid to add Hogan Lovells partner Neal Katyal to its legal team in a high-stakes bankruptcy case, citing his hourly rate of $2,465 — a possible new legal industry high, Reuters reported. Johnson & Johnson is using the proceedings to try to resolve claims that its baby powder and other talc-based products caused cancer. The company, which maintains the products are safe, in October assigned thousands of talc lawsuits to a new subsidiary, LTL Management LLC, and placed it in bankruptcy. The U.S. trustee in the chapter 11 case on Friday asked a federal bankruptcy judge in New Jersey to block LTL from retaining Katyal, calling his hourly rate “significantly higher” than that of partners from the seven other law firms already involved in the case. LTL asked the judge for approval to add Katyal to its legal team earlier this month, citing his and Hogan Lovells' expertise in federal appeals. Multiple talc claimants have appealed the February ruling that allowed LTL's bankruptcy to move forward.

Endo International PLC has started negotiations with its lenders and senior bondholders about a possible restructuring of more than $8 billion in debt as the drugmaker faces litigation over opioid sales, WSJ Pro Bankruptcy reported. Lenders initiated the discussions after the pharmaceutical company reported a sharp drop in quarterly earnings earlier this month stemming from the loss of exclusive rights over a key drug. Endo, which faces about 3,500 lawsuits from state and local governments and healthcare providers over claims that it helped fuel the opioid addiction epidemic, has been warning of the risk of a bankruptcy filing in its regulatory disclosures since last year. Gibson, Dunn & Crutcher LLP, a law firm representing the lenders, has entered confidential discussions with the company, although the lenders haven’t yet signed confidentiality agreements to be able to view proprietary information. The company, which has reached settlements with a handful of state and local governments over opioid liabilities, faces thousands more lawsuits it hasn’t resolved. Endo, which is domiciled in Ireland following a 2014 corporate tax inversion and has operations in Malvern, Pa., this month reported a drop in first-quarter earnings that pushed down the prices on its loans and bonds.

The Archdiocese of Santa Fe and representatives for church clergy sex abuse survivors announced agreement Tuesday on a $121.5 million fund to compensate hundreds of adults who contend they were subjected to childhood sexual abuse by priests and other clergy dating back decades, the Albuquerque Journal reported. The announcement in U.S. Bankruptcy Court in Albuquerque kicked off a new phase of the 41-month-old chapter 11 reorganization sought by the archdiocese to stem financial losses from continuing legal claims that it failed to protect children from pedophile priests and other clergy assigned to schools and parishes. Still to come is the allocation process of deciding how much to pay each of the 394 or so claimants. The next step would be for the claimants to vote on the reorganization plan. The archdiocese was facing about 36 lawsuits alleging clergy abuse when Archbishop John C. Wester announced the bankruptcy filing in 2018, saying he hoped it would help provide a fair and equitable settlement with survivors. The bankruptcy put the pending civil cases on hold. Of the 29 Catholic dioceses or religious orders to file for bankruptcy protection in the past 20 years, the Archdiocese of Santa Fe’s proposed settlement would be among the largest monetary payouts to survivors, with the Archdiocese of St. Paul and Minneapolis, the San Diego Diocese, and a Jesuit religious order in Portland, Oregon, paying higher amounts. The Archdiocese of Santa Fe case also has one of the largest number of claimants alleging sexual abuse. Money for the settlement comes from the proceeds of archdiocese sales of property and other assets, contributions from parishes in the archdiocese, and insurance proceeds.

A bankruptcy judge approved a $610 million asbestos-injury compensation plan covering O-I Glass Inc., freeing it from legacy asbestos liabilities that it isolated from its glassmaking business and pushed into chapter 11, WSJ Pro Bankruptcy reported. O-I’s Paddock Enterprises LLC developed a bankruptcy plan backed by representatives for current and future asbestos claimants, “a result that nobody can have any issue with,” said Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del. The bankruptcy plan relies on funding from the parent company’s Owens-Illinois glassmaking business to compensate individuals who allege they were exposed to asbestos from a corporate predecessor’s Kaylo insulation products. O-I used a Delaware corporate reorganization to fill Paddock with asbestos liabilities before placing it in bankruptcy, isolating them from the rest of the business. That allowed O-I to drive a resolution of the asbestos claims in bankruptcy, while keeping the valuable glassmaking operation out of chapter 11. The Delaware reorganization that landed Paddock in bankruptcy “of course raised the antennae of everyone who was in the courtroom,” Judge Silverstein said from the bench on Monday. But the resulting bankruptcy plan pays injury claims at 100 cents on the dollar, she said.

An attorney for the Archdiocese of Santa Fe expressed hope Monday a resolution could be announced today in its 3½-year bankruptcy case, the Santa Fe New Mexican reported. “I’m pleased to tell the court that we are very, very close,” Tom Walker of Albuquerque told U.S. Bankruptcy Judge David Thuma in an update. Walker asked that a status conference scheduled for yesterday be moved to Tuesday to allow for more negotiations, and Judge Thuma complied. The Archdiocese of Santa Fe filed for chapter 11 bankruptcy in December 2018 and has been trying to raise money to work out a settlement with about 400 people who allege sexual abuse perpetrated by Catholic clergy members. The archdiocese also has become entangled in conflict with some of its insurers over how much they should pay. Insurance is expected to provide a chunk of whatever sum goes to the accusers. The archdiocese has said it attempted to verify the accusations and therefore is fairly certain most or all involved in this case are victims of clergy abuse. Judge Thuma said yesterday that he understood the parties involved are “close to reaching a deal.”

Families of the Sandy Hook shooting victims are close to an agreement to resume their defamation lawsuits against conspiracy theorist Alex Jones and his Infowars site following a delay caused by its bankruptcy filing, WSJ Pro Bankruptcy reported. Lawyers for the Sandy Hook families said in a court hearing Friday they would move the defamation litigation pending against Mr. Jones back to state court in exchange for permanently dropping legal claims against a few Infowars properties that filed chapter 11 in April. The arrangement, which hasn’t been finalized, would let families escape the bankruptcy case and resume their lawsuits in Connecticut and Texas state courts, where Mr. Jones has already been found liable in the litigation. Families would also be clear to proceed with claims against Infowars’ parent company, Free Speech Systems LLC, which hasn’t filed chapter 11. Families’ lawyers have accused Mr. Jones, who also didn’t file personal bankruptcy, of placing certain media assets in chapter 11 to avoid being held accountable for falsely claiming the 2012 school shooting was a hoax. His lawyers have denied the bankruptcy was filed in bad faith and said that chapter 11 was the appropriate forum for settling the families’ legal claims.

Idaho officials on Friday announced a $119 million settlement with drugmaker Johnson & Johnson and three major distributors over their role in the opioid addiction crisis, the Associated Press reported. Republican Gov. Brad Little and Republican Attorney General Lawrence Wasden said that it’s the second-largest consumer settlement in state history, trailing only the 1998 national tobacco settlement of $712 million. An Ada County judge on Wednesday approved the settlement that Little and Wasden had agreed to in August. The state’s participation made it eligible for a minimum of $64 million. It also opened the way for local government entities to take part, and all those eligible did so by the end of December, boosting the amount to $119 million. The money will address damage wrought by opioids, which the federal government declared a public health emergency in 2017. Johnson & Johnson and the three distributors finalized a national $26 billion settlement in February.

A federal appeals court has agreed to review Johnson & Johnson’s use of a bankruptcy tactic to shift into chapter 11 mass litigation that alleges the company’s talc-based baby powder caused cancer, the Wall Street Journal reported. The U.S. Court of Appeals for the Third Circuit yesterday granted requests by talc injury claimants for an immediate review of an emerging strategy used by J&J and a handful of other large, solvent companies to freeze roughly a quarter of a million injury lawsuits through bankruptcy. The appeal stems from a February ruling by Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., declining to throw out the chapter 11 case of LTL Management LLC, a newly formed J&J subsidiary created to carry talc-related liabilities into chapter 11. Judge Kaplan agreed with J&J that the bankruptcy case was filed for a valid purpose, saying that chapter 11 provides cancer victims with a fairer and more efficient forum to receive compensation than the civil jury system. Injury claimants argued that J&J’s strategy isn’t permitted by the bankruptcy code and have sought to overturn Judge Kaplan’s ruling through an appeal. The ruling kept roughly 38,000 talc injury lawsuits paused in bankruptcy, aiding J&J’s efforts to settle current and future claims alleging its talc-based baby powder caused cancer, which the company denies. Despite allowing the bankruptcy case to proceed, Judge Kaplan said in March that the Third Circuit should review his decision as soon as possible. To access bankruptcy, J&J used a Texas law to fill the LTL subsidiary with talc-related liabilities and limited business operations before it filed chapter 11.

Families of the victims of the collapse of the Champlain Towers South condominium in Surfside, Fla., that killed 98 people last year have reached a $997 million settlement to compensate them for their staggering losses of life, the New York Times reported. The settlement, revealed at a court hearing on Wednesday and still pending final approval, includes insurance companies, developers of an adjacent building and other defendants in the extensive civil case. It comes six weeks before the first anniversary of the tragedy on June 24. Before Wednesday’s surprise announcement, the judge had approved a far smaller settlement of $83 million to be split among condo unit owners for their property losses. No compensation had been determined for the families of the dead, who would now receive the $997 million. How the money will be divided among the relatives of the 98 victims will be determined in the coming weeks. The National Institute of Standards and Technology is still investigating what caused the 13-story, 135-unit building to partially crumble in the middle of the night, a review that could take years.