%1

The company that purchased assets of the railroad responsible for a fiery oil train derailment that killed 47 people in Canada says that it is seeing growth as it rebuilds the business, the Associated Press reported on Saturday. Central Maine and Quebec Railway has nearly doubled its business from June, but it has yet to reach levels achieved before the disaster in Lac Megantic, Quebec, in July 2013, said Ryan Ratledge, chief operating officer. The new railroad already completed $10 million worth of track improvements — mostly in Quebec — that were aimed at improving safety and allowing freight trains that had been slowed to 10 mph in some sections to boost their speeds to 25 mph, he said. Montreal, Maine and Atlantic Railways went bankrupt after a train transporting crude oil was left unattended by its solo operator and rolled out of control into Lac Megantic. More than 60 tankers tumbled off the tracks and several exploded. In Lac-Megantic, the focus is on compensating survivors. The environmental cleanup alone could end up costing $200 million to $500 million, based on early estimates.

Attorneys say they are one step closer to implementing a settlement negotiated between victims of the Freedom Industries chemical leak, the Charleston (W.Va.) Daily Mail reported on Saturday. Attorneys filed a modified settlement agreement with AIG Specialty Insurance Co. on Thursday. In a previous bankruptcy hearing, attorneys debated which section of Freedom’s insurance policy should cover claims resulting from the Elk River chemical leak. In July, three former Freedom executives, William Tis, Charles Herzing and Dennis Farrell, objected to the potential agreement because it didn’t provide payment of their legal fees. At a previous hearing, attorneys representing the former executives argued Freedom should be covered under a certain section, which would cover the loss and the cost of defending that claim.

The messy collapse of the mega-firm Dewey & LeBoeuf has claimed another casualty, and this time it’s one of the defunct law firm’s leading rainmakers, according to a New York Times analysis on Saturday. John J. Altorelli, now co-head of the U.S. finance practice at DLA Piper, the world’s largest firm measured by revenue, was among Dewey & LeBoeuf’s most important rainmakers, the term used to denote partners who land clients. At his peak, he was credited with generating more than $33 million in annual revenue for the firm. In 2011 alone, his compensation was $6 million. That same year, the firm was so eager to keep him as a partner that it offered a contract guaranteeing him $5 million a year for three years. His departure from Dewey & LeBoeuf in April 2012 was a precipitating factor in the firm’s collapse, which came soon after, in May 2012. Despite all these trappings of success, Altorelli, who is 57, filed for personal bankruptcy protection on Nov. 25 in Connecticut, where he owns a sprawling home currently on the market for $3.9 million. In a cautionary tale for any firm that may be contemplating a bankruptcy filing, the trustee overseeing Dewey & LeBoeuf’s bankruptcy is suing him for $12.9 million. He’s surrounded by lawyers and is personally responsible for his legal fees. He’s been grilled by prosecutors and cited as a potential witness in the pending criminal trial against Dewey & LeBoeuf’s former leaders. The Internal Revenue Service is also investigating him.

A bankruptcy judge said he won't reconsider a ruling that slashed Garlock Sealing Technologies' asbestos liability to $125 million from $1.3 billion, but plaintiffs' lawyers plan to appeal the decision, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge J. Craig Whitley denied on Tuesday the request by the official committee of asbestos personal injury claimants, which had asked the judge to consider new evidence that it said could change Garlock's liability to asbestos claimants.

The top executive charged in a chemical spill that left 300,000 people without drinking water lied about his role with the company to protect his personal wealth of nearly $8 million from lawsuits, according to an FBI affidavit, the Associated Press reported yesterday. In bankruptcy court hearings and meetings, former Freedom Industries President Gary Southern repeatedly said that he had little to do with the company before it was sold a few weeks prior to the January chemical spill. But an FBI affidavit said that Southern had overseen day-to-day operations at the chemical storage company, hired employees and executed contracts for several years, according to a complaint unsealed on Monday. Southern negotiated the sale of Freedom Industries to Chemstream Holdings Inc. just weeks before the spill, and discussed how much money would be set aside to deal with necessary repairs at the site, the complaint said. Investigators discovered holes in tanks, shoddy last-resort containment walls and other deficiencies. Southern, who has previously denied wrongdoing, faces charges of bankruptcy fraud, wire fraud and lying under oath. If convicted of all the charges, he faces up to 30 years in prison.

The trustee overseeing the bankruptcy of a Massachusetts pharmacy linked to a 2012 meningitis outbreak that killed 64 people filed a plan that would set aside at least $135 million to compensate victims and their families, Reuters reported yesterday. The plan was filed after a federal bankruptcy court in July approved a deal to settle scores of lawsuits against New England Compounding Center (NECC). NECC shut down in October 2012 after authorities linked it to the worst outbreak of fungal meningitis in U.S. history due to drugs it shipped to health providers across the country. The company filed for bankruptcy two months later. Owners of NECC, which produced a tainted steroid that sickened more than 700 people in 20 states, have already contributed nearly $50 million to the NECC estate for eventual distribution and are expected to contribute additional sums through tax refunds and the sale of a related business.

Two additional deaths have been attributed to a faulty ignition switch in General Motors Co. vehicles, bringing the total to 35, according a report yesterday from the lawyer overseeing a program to compensate for deaths and accidents linked to the part, Reuters reported yesterday. As of Friday, the program, which began accepting claims on Aug. 1, had received 2,180 claims for injuries and deaths, an increase of more than 3 percent from a week earlier, according to the report from the office of lawyer Kenneth Feinberg. Overall, the fund has received 225 claims for deaths, 139 for catastrophic injuries and 1,816 for less-serious injuries requiring hospitalization. Of those, claims from 35 deaths, five severe injuries and 39 other injuries have been deemed eligible for the program. The report said 215 claims were deemed ineligible, while 455 claims lacked sufficient paperwork or evidence and nearly half — 1,076 — had no documentation at all.

Earlier this year Maryland’s Community Law Center had its first victory under an updated law meant to stop bad behavior by the owners of blighted properties that refuse to clean them up, but late Tuesday night the progress in that effort was halted as the landlord filed for bankruptcy, the Wall Street Journal reported on Saturday. Last year, using Maryland’s revised community bill of rights law, a number of community associations and the Community Law Center sued Scott Wizig — a landlord who was sued by Eliot Spitzer in New York in the early 2000s and is the subject of a recent investigative report by the Houston Press — and nine LLCs that owned 57 nuisance properties in Baltimore. These properties were uninhabitable, vacant houses that were attracting crime and trash, allegedly posing a health and safety hazard and harming the community. The lawsuit alleged that Wizig was breaking the law at approximately 140 of his Baltimore properties. The bankruptcy filings on tuesday allowed Wizig — who, despite the court’s order, hasn’t brought the properties to code, according to Robin Jacobs of the Community Law Center — to freeze litigation. A request to pull the litigation into the bankruptcy case, rather than allow it to proceed in state court, has already been filed alongside the bankruptcy petitions.

The Archdiocese of St. Paul and Minneapolis (Minn.) reported a $9.1 million operating deficit for fiscal year 2014 and reiterated Thursday that it's considering filing for bankruptcy because of the potential for more lawsuits by victims of clergy sexual abuse, the St. Paul Pioneer Press reported today. The archdiocese released its financial information in its newspaper, the Catholic Spirit, more than a week after it said it was cutting its central office budget by 20 percent, including 11 jobs. The archdiocese said its operating deficit can be partly attributed to $4.1 million spent to address allegations of clergy sexual abuse since May 2013, when a three-year window opened for abuse victims to file claims that were otherwise barred under the statute of limitations. The archdiocese's chief financial officer, Thomas Mertens, said that outside professionals were brought in and that most expenses were related to a review of priest files, investigation of insurance coverage and analysis of financial options. Nienstedt said that since the statute of limitations was lifted, the archdiocese has settled two cases and 20 trials are scheduled. Victims of past abuse still have about 18 months to pursue litigation.

The attorney general of Arizona said yesterday that the state had filed suit against General Motors, claiming that the automaker had defrauded the state’s consumers of an estimated $3 billion, the New York Times reported today. The suit is the first major legal action against GM over its record number of recalls this year, most notable among them one for a defective ignition switch in 2.6 million small cars that was delayed for a decade. The complaint was harsh and unsparing in its criticism of GM, suggesting that the automaker intentionally misled consumers through its advertising, website and public statements, and that some of its top leaders were complicit in the alleged misdeeds. It said “New GM,” the term used for the company that emerged from bankruptcy in 2009, “was not born innocent.”