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The Archdiocese of Santa Fe, N.M., which is in the throes of chapter 11 bankruptcy, sued four insurance companies this week, claiming they haven't fulfilled their contracts, the Santa Fe New Mexican reported. The archdiocese is trying to raise enough money to settle the bankruptcy case with more than 400 victims of clergy sexual abuse. The complaint accuses the insurers of "failure to honor contractual commitments to provide liability coverage to the Archdiocese for claims alleging decades-old sexual abuse." It "seeks to resolve the sexual abuse claims with proceeds from its liability insurance," the lawsuit says. The archdiocese filed for chapter 11 bankruptcy more than three years ago. It wants to raise an amount of money not publicly specified in order to settle with the victims. The archdiocese has used property sales and auctions and contributions to generate money. But insurance payouts are expected by the archdiocese and others to fund a large chunk of the settlement. Defendants named are Great American Insurance Co., Arrowood Indemnity Co., St. Paul Fire and Marine Insurance Co. and United States Fire Insurance Co.

The three largest U.S. drug distributors and drugmaker Johnson & Johnson have agreed to finalize a proposed $26 billion settlement resolving claims by states and local governments that they helped fuel the U.S. opioid epidemic, Reuters reported. Distributors McKesson Corp., AmerisourceBergen Corp., Cardinal Health Inc. along with J&J had until Friday to decide whether enough cities and counties nationally had opted to join the landmark settlement to justify moving forward with it. The deal aims to resolve more than 3,000 lawsuits largely by state and local governments seeking to hold the companies responsible for an opioid abuse crisis that has led to hundreds of thousands of overdose deaths over the last two decades. The distributors said today that there was "sufficient participation" to proceed. Charles Lifland, an attorney for J&J, in a letter yesterday reviewed by Reuters told lawyers for the states and local governments it also had determined there had been a "sufficient resolution" of the claims. The announcement paves the way for the companies to begin making payments to the governments in April, money that officials say will be used to fund treatment and other programs aimed at addressing the health crisis.

The executive who ran Texas’ power grid during last year’s freak winter storm testified Wednesday that he kept power prices at sky-high levels for days at the behest of a state regulator acting on directives from Gov. Greg Abbott to keep blackouts at bay, WSJ Pro Bankruptcy reported. In a bankruptcy-court trial involving the state’s largest electricity cooperative, William Magness, the former CEO of the Electric Reliability Council of Texas, testified about why he decided to keep prices at the maximum allowed level for more than three days during Winter Storm Uri. Brazos Electric Power Cooperative Inc. questioned Mr. Magness as a witness as it tries to cut down the roughly $1.9 billion bill from Ercot stemming from the winter storm, which knocked out power across the state. In response, regulators ordered Ercot to raise power prices to their maximum level of $9,000 per megawatt hour to try to encourage more generation, hitting Brazos and other energy retailers with huge charges. Mr. Magness testified that at a meeting at Ercot’s control room during the storm, DeAnn Walker, then chairman of the Texas Public Utility Commission, said the governor was concerned the state would have to reimpose blackouts.

A Mexican affiliate of Kimberly-Clark Corp. that sold hand sanitizer made with a toxic, industrial form of alcohol filed for bankruptcy, blaming the mistake on a scramble to find ingredients early in the pandemic’s supply-chain meltdown, Bloomberg News reported. 4E Brands Northamerica, a subsidiary of Kimberly-Clark de Mexico SAB de C.V., blamed its chapter 11 case on a bad batch it made from methanol alcohol near the onset of the COVID-19 outbreak in 2020. Amid a shortage of hand sanitizers, 4E Brands sought new suppliers of ethyl alcohol, a federally approved ingredient, according to court papers filed Tuesday in federal court in Laredo, Texas. The company “sourced some of its raw ingredients from opportunistic suppliers who, whether intentionally or mistakenly, provided methanol instead of ethyl alcohol,” David M. Dunn, the chief restructuring officer, said in court papers. The company now faces multiple personal injury and wrongful death lawsuits, he said. n 2020, the U.S. Food and Drug Administration reacted to a shortage of hand sanitizers by temporarily loosening restrictions on manufacturers, according to Dunn. 4E Brands ramped up production using new suppliers who sold the company the wrong type of alcohol, Dunn said in his filing. 4E Brands “did not know of the substitution. It believed ethanol was used to manufacture the hand sanitizer it distributed,” Dunn said, referring to the safer type of alcohol. “In fact, it contained methanol.”

It was a $1.9 billion bill that forced Brazos Electric Power Cooperative, one of Texas’ oldest and most creditworthy power sellers, into bankruptcy last year. Now a federal judge is being asked to make more than half the sum disappear, Bloomberg News reported. Brazos Electric on Tuesday kicked off a long-awaited trial against the state’s grid operator, the Electric Reliability Council of Texas, over sky-high power bills racked up during a devastating winter storm last year. Ercot raised prices to $9,000 per megawatt-hour — the legal maximum — for several days during the storm, forcing Brazos to buy electricity so pricey it became insolvent in a flash. The extreme prices were supposed to encourage idle generators to provide electricity, but any plants that weren’t frozen or lacking fuel were already producing power, lawyers for Brazos said in a Houston courtroom Tuesday. Their contention is that Ercot wrongly meddled in the market, and without that interference Brazos would owe about $800 million rather than $1.9 billion. “We don’t dispute what we bought, we don’t dispute how much we bought — what we dispute is the price,” Lino Mendiola, an attorney for Brazos, told U.S. Bankruptcy Judge David R. Jones in Houston on Tuesday. “It was literally the most expensive thing Ercot could’ve done and it accomplished nothing.”

The members of the Sackler family who own Purdue Pharma LP have agreed to contribute as much as $6 billion to settle litigation accusing them of fueling opioid addiction, a new attempt to resolve civil liability and get the drugmaker out of bankruptcy after a previous chapter 11 deal was overturned, WSJ Pro Bankruptcy reported. The revised offer marks an increase from the $4.5 billion settlement the Sacklers had previously agreed to under a bankruptcy plan for Purdue, the OxyContin manufacturer closely associated with the opioid epidemic. A federal judge rejected that settlement proposal in December, ruling in favor of the handful of state attorneys general who didn’t accept the Sacklers’ offer. The revised proposal, revealed in court papers filed Friday, has the support of most but not all of the attorneys general who held out from the previous deal. Purdue filed for chapter 11 protection in 2019, overrun with lawsuits alleging its flagship OxyContin drug had fueled addiction. The company pleaded guilty in 2020 to three federal felonies surrounding the marketing and sale of OxyContin. If a bankruptcy plan incorporating the new settlement is confirmed, the Sacklers “would be paying, in total, not less than $5.5 billion and up to $6 billion,” according to a mediator’s report filed in Purdue’s chapter 11 case.

The final hearing on the Boy Scouts of America’s proposed reorganization plan and underlying sex abuse settlement has been pushed back to allow survivors who may want to change their votes on the pact more time to understand recently revised terms of the deal, Reuters reported. On Friday, U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Del., who is overseeing the youth organization's bankruptcy and will ultimately decide whether to approve the abuse deal, pushed the start of the hearing, which had already been postponed, to March 14. David Buchbinder, an attorney for the U.S. Department of Justice's bankruptcy watchdog, the U.S. Trustee, along with other lawyers, told Silverstein that the recent changes were significant and would likely be confusing to some survivors. The Boy Scouts announced an amended deal on Feb. 10 that brought in key support for the settlement from the official committee representing survivors in the youth organization’s bankruptcy. Survivors have long been split on the deal, but with the committee now on board, the organization is reaching out to survivors who opposed the settlement in an attempt to persuade them to change their votes. The Irving, Texas-based youth group filed for bankruptcy in February 2020 to resolve decades of sex abuse allegations. The settlement still includes a $2.7 billion trust to compensate men who say they were sexually abused as children by troop leaders. But it also provides for an “independent review” option for survivors who say they were subject to especially severe abuse, allowing for a more in-depth evaluation of their claims than the originally envisioned plan. That option comes with a fee of up to $20,000.

A Johnson & Johnson subsidiary proposed on Friday that it would submit to an independent examination of the corporate restructuring the healthcare giant undertook in an attempt to settle in U.S. bankruptcy court thousands of lawsuits alleging that J&J baby powder and other talc products cause cancer, Reuters reported. Greg Gordon, a lawyer for J&J subsidiary LTL Management LLC, raised during a hearing before U.S. Bankruptcy Judge Michael Kaplan the idea of a court-appointed examiner that could "come in and do whatever investigation it wants" to determine whether the restructuring short-changed cancer victims. Cancer plaintiffs have asked Kaplan to dismiss LTL's bankruptcy case and allow them to resume the lawsuits against J&J. Kaplan, who presided over a week-long hearing on the matter in Trenton, New Jersey, has said that he will decide by the end of the month whether to dismiss the case. J&J is attempting to use LTL's bankruptcy case to resolve about 38,000 lawsuits alleging the company's talc products caused ovarian cancer and mesothelioma, an illness linked to asbestos exposure. J&J maintains that its talc products are safe and asbestos-free, but attorneys for LTL argued that bankruptcy is the only practical way to resolve the sheer volume of lawsuits. During closing arguments in the hearing, Gordon floated the option of an independent examiner to clear the air after lawyers for cancer victims argued the bankruptcy was improper.

A year after a historic winter storm left millions of Texans without power for days, the state’s largest electrical co-op is set to open its case in bankruptcy court in Houston today, contending that it was overcharged hundreds of millions of dollars by the Texas grid operator, the Houston Chronicle reported. Waco-based Brazos Electric, which serves 1.5 million customers in Central Texas, argues that the Electric Reliability Council of Texas broke rules governing the state’s power market when it set power prices at the $9,000 per megawatt hour price cap — more than 300 times the normal price. The elevated price was meant to lure generators to quickly return frozen power plants back online. The case is set to be heard by U.S. Bankruptcy Judge David Jones, who will decide what portion of the $1.9 billion ERCOT bill Brazos needs to pay, with the money distributed among power generators and other market partcipants. Claims by other creditors, including $180 million owed to natural gas suppliers like Koch Energy Services and French energy giant TotalEnergies, will be heard later.