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A Democratic Senator wants information about a decision by the maker of OxyContin to file for bankruptcy in a New York City suburb known as a popular landing spot for large corporate restructurings because of the single judge overseeing chapter 11 cases there, the Wall Street Journal reported. Sen. Tammy Baldwin (D-Wis.) yesterday asked Purdue Pharma LP’s board to turn over any emails and other information documenting the company’s decision to change its New York address for receiving legal documents from Albany to White Plains about six months before filing for chapter 11 last year. Judge Robert Drain is the only bankruptcy judge sitting in White Plains, meaning that cases filed there were until recently assigned exclusively to him. That sets White Plains apart from other popular bankruptcy venues such as Delaware, where cases are randomly assigned to one of several judges. Purdue changed an address it has registered with the New York Department of State shortly before Chief Executive Craig Landau said in an interview published in the Washington Post that the business was considering filing for chapter 11 protection, according to the letter Sen. Baldwin sent Purdue. She and other Democratic lawmakers previously urged Judge Drain not to grant Purdue’s request to pay Landau a bonus that could be worth millions of dollars. Purdue is using bankruptcy to try to implement a multibillion-dollar settlement of thousands of lawsuits brought by states, local governments and Native American tribes accusing the company of contributing to widespread opioid addiction. The settlement proposal, which requires court approval, would cede control of Purdue to creditors and includes a roughly $3 billion payment from the Sackler family members that own the company. Based in Stamford, Conn., Purdue changed registered agents to one that has a White Plains address in March 2019, according to filings with the New York Department of State.

While companies large and small are already succumbing to the economic effects of the coronavirus, experts say the wave of bankruptcies is going to get bigger, the New York Times reported. Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record for so-called mega bankruptcies — filings by companies with $1 billion or more in debt. And he expects the number of merely large bankruptcies — at least $100 million — to challenge the record set the year after the 2008 economic crisis. Even a meaningful rebound in economic activity over the coming months won’t stop it, Altman said. More than 6,800 companies filed for chapter 11 bankruptcy protection last year, and this year will almost certainly have more. The flood of petitions from the worst economic downturn since the Great Depression could swamp the system, making it harder to save the companies that can be rescued, bankruptcy experts said. Without reform in the system, “we anticipate that a significant fraction of viable small businesses will be forced to liquidate, causing high and irreversible economic losses,” a group of academics said in a letter to Congress in May. Robert J. Keach, co-chair of ABI's Chapter 11 Reform Commission, said that many companies had so far managed to put off bankruptcy by amassing cash and conserving it as best they can: drawing down existing credit lines, furloughing workers, delaying projects and taking advantage of federal and state pandemic-relief programs. But when those programs expire, the companies will start burning through their cash. That’s when bankruptcy filings are likely to soar and stay elevated, Keach said. Expect “a Covid-19 cliff” in the next 30 to 60 days, he said.