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Almost $400 million of fees and expenses have been racked up by professionals working the bankruptcy of Stamford, Conn.-based Purdue Pharma LP, Bloomberg News reported. The bills add up to more than half the amount that all individuals harmed by OxyContin would share under the drugmaker’s proposed settlement of personal injury claims. Purdue’s financial woes have turned into a cash machine for the lawyers and consultants hired by the company and its creditors who are sorting through claims that the drugmaker fanned the flames of the U.S. opioid crisis. “These are huge — this is a large chunk of money that would otherwise be going to pay victims of a horrible tort,” said Prof. Bob Lawless University of Illinois School of Law. “You have to pay the undertaker. Whether they have to be paid that much is another question.” Purdue is unusual because its biggest creditors aren’t vendors or landlords, but cities and states reeling from the opioid epidemic, as well as the people who lost everything, including their loved ones, to opioid drugs. Purdue Pharma is paying market rates for professionals in the case, the company said in an emailed statement, noting that it’s responsible for the fees of multiple creditor groups.

Hedge-fund founder Dan Kamensky was sentenced to six months in prison for bankruptcy fraud over his attempt to quash a rival bid for shares of a Neiman Marcus Group Ltd. business that he wanted to buy himself, WSJ Pro Bankruptcy reported. The sentence, handed down in a federal courtroom in New York, falls short of the 12- to 18-month prison term sought by prosecutors but exceeds the punishment sought by Kamensky’s lawyers, who asked that he only be put on probation and be required to do community service. The founder of hedge-fund firm Marble Ridge Capital LP, Kamensky admitted to prosecutors that last year he tried to sideline a competitor’s bid for shares of Mytheresa, a thriving e-commerce business formerly owned by Neiman Marcus, which was at the time in bankruptcy. His actions amounted to a criminal violation of bankruptcy law because, as a member of an official creditors committee in the Neiman Marcus chapter 11 case, he had an obligation to look out for all of the company’s creditors, not just his firm’s own financial interests. The bankruptcy-fraud charge he pleaded guilty to in February carried a maximum five-year prison sentence. In addition to the six-month prison term, Kamensky was sentenced Friday to six months of supervised release under home detention. During Friday’s court hearing, Judge Denise Cote described Kamensky as a “good man, but one who lost his moorings” under pressure. “He came undone,” the judge said. “He tried to control what he could not control.” Kamensky’s arrest came after he waged a legal battle for more than two years against Neiman Marcus and its private-equity backers over Mytheresa, a fast-growing online subsidiary. He took issue with a spinoff transaction that he said deprived Neiman’s creditors of its crown jewel, while rewarding the retail chain’s owners. (Subscription required.)

The National Rifle Association, long a feared power broker, will learn its fate next week in a court ruling that could hobble the gun rights group and imperil the three-decade reign of its controversial boss, Wayne LaPierre, Bloomberg News reported. The judge is weighing several options. He could let the NRA’s bankruptcy case go forward, giving the group a measure of refuge from a New York lawsuit that threatens its assets and even its existence. He could put the group under the control of a trustee, empowered to make decisions about its finances and its future. Or, in a highly unusual move, he could throw the NRA out of bankruptcy court altogether. For an organization that was until recently the most potent single-issue lobby in the U.S., none of the possible outcomes are great. LaPierre is trying to use the bankruptcy process to escape what he claims is political persecution by New York’s elected leaders and reincorporate the group in gun-friendly Texas. In the New York lawsuit, filed last August seeking to dissolve the NRA, Attorney General Letitia James alleged that LaPierre has spent hundreds of thousands of dollars of NRA funds for private plane trips for himself and his family, among many other indulgences. If the bankruptcy case is dismissed, James would have an easier time seizing the group’s assets, should she win her lawsuit. The NRA has called James’s suit a baseless attack on the Second Amendment timed to have maximum impact during the election cycle. For more than two weeks, U.S. Bankruptcy Judge Harlin “Cooter” Hale in Dallas listened to testimony about palace intrigues, shredded notes and excessive personal spending. The dispute pits several entities against the NRA. Allied with James is the gun group’s former ad agency, Ackerman McQueen Inc., which claims the bankruptcy filing was made in bad faith and should be dismissed. Even the U.S. office that monitors bankruptcies said at the end of the trial that the NRA doesn’t belong in Hale’s court. Meanwhile, a rebel NRA director has asked the judge to let the bankruptcy continue — but start a new investigation of the group’s management and board. The NRA responded to a request for comment on the case by referring to statements its attorney, Gregory Garman, made during the trial. In his closing arguments, Garman admitted that the testimony had included “cringe-worthy” evidence about the group, at one point saying, “Does anyone want to hear about your CFO taking the Fifth? Of course not.”

Investment banks and other financial advisers are putting the business of fixing troubled companies on the back burner as financial distress stemming from the COVID-19 pandemic diminishes, WSJ Pro Bankruptcy reported. Instead, advisory firms like FTI Consulting Inc., Greenhill & Co. and Lazard Ltd., are turning more focus to blank-check companies; mergers and acquisitions; capital raising; and environmental, social and corporate governance issues. When the COVID-19 pandemic hit the U.S. last year, it was expected to unleash a wave of financial distress and bankruptcies not seen since the financial crisis. While bankruptcy filings did rise in 2020, they have slowed in recent months and haven’t been as high as investors and analysts initially predicted. Credit-rating firms are projecting that debt defaults will decline further this year as the economy bounces back and market conditions remain favorable even for risky borrowers. But financial advisers have made up for the decline in corporate distress with revenue gains in other areas, working on mergers and acquisitions and special-purpose acquisition companies, which are publicly listed blank-check companies that exist to buy private businesses.