Category Archives: Bankruptcy

Former users of the bankrupt Canadian crypto exchange Quadriga CX will soon get a check for 13% of their claim, according to a notice to creditors published late Friday by accounting giant EY.

Documents from EY shows Quadrigas estate owes CAD $303.1 million ($222.3 million) across 17,648 claims from creditors, including Canada Post and the countrys tax authority, Canada Revenue Agency (CRA).

Filings show that there are 15 claims with a value greater than CAD $1 million, and 28 claims with a value between CAD $500,000 and $999,999. There are also 15,236 claims valued under CAD $10,000.

According to EY, CRA determined that Quadriga had not reported income during its 2016 2018 fiscal periods and subsequently owes $11.7 million in back taxes.

The value of the crypto will be paid out, according to values pegged at April 15, 2019 market prices.

EY says that users with bitcoin claims will get CAD $6,739.08 ($7,122.9) per BTC. For Ethereum, users will get CAD $223.45 ($299.45) per ether.

Originally posted here:

Quadriga CX Bankruptcy Claimants to Get 13% on the Dollar - CoinDesk

SAN DIEGO, May 14, 2023 /PRNewswire/ -- Sorrento Therapeutics, Inc. (OTC: SRNEQ, "Sorrento"), a biopharmaceutical company dedicated to the development of life-saving therapeutics to treat cancer, intractable pain, and infectious disease, today announced that, in connection with its ongoing chapter 11 case, the U.S. Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court") has entered an order compelling certain brokerage firms to (on or before May 23, 2023) credit all shares of common stock of Scilex Holding Company (Nasdaq: SCLX) that Sorrento distributed to its stockholders on or around January 19, 2023 (the "Dividended Scilex Stock") to their customers' accounts.

In addition, the Bankruptcy Court ordered the brokerage firms to file a report with the Bankruptcy Court detailing as to each customer's account, on an anonymous basis, the number of shares of Dividended Scilex Stock credited and the quoted price of such stock on a marked-to-market basis. The brokerage firms must also complete and file a report with the Bankruptcy Court regarding their compliance with the court's order.

The Bankruptcy Court's order approves a motion filed by the Official Committee of Equity Security Holders in Sorrento's chapter 11 case, who had requested the relief. The committee of equity security holders was appointed in the case to act as a fiduciary for, and represent the interests of, all Sorrento stockholders. A copy of the order has been served on the brokerage firms via overnight mail and email.

WHAT SHOULD HOLDERS OF DIVIDENDED SCILEX STOCK DO NEXT?

Sorrento strongly urges all holders of Dividended Scilex Stock to contact their individual brokers to demand the following:

That your shares of Dividended Scilex Stock be distributed into your individual brokerage account.

That your broker provide real-time quotes on the Dividended Scilex Stock in your individual brokerage account.

That your broker certify to the Bankruptcy Court such broker's compliance with Regulation SHO and 17 C.F.R. 240.15c3-3.

Story continues

If holders of Dividended Scilex Stock are unable to reach their brokers and have their shares of Dividended Scilex Stock distributed to their individual accounts and/or real-time quotes provided on such stock in their individual accounts, Sorrento strongly urges such holders to notify Sorrento, and Sorrento will in turn notify the Bankruptcy Court of such situation. Such holders can submit a notification to Sorrento at sclxdividendshares@sorrentotherapeutics.com.

As previously announced, on April 25, 2023, the Bankruptcy Court entered an order extending the expiration of the restrictions on transfer of the Dividended Scilex Stock from May 11, 2023 to September 1, 2023 (or an otherwise earlier date to be determined, as set forth in the order).

About Sorrento Therapeutics, Inc.

Sorrento is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain (non-opioid treatments), autoimmune disease and COVID-19. Sorrento's multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as next-generation tyrosine kinase inhibitors ("TKIs"), fully human antibodies ("G-MAB library"), immuno-cellular therapies ("DAR-T"), antibody-drug conjugates ("ADCs"), and oncolytic virus ("Seprehvec"). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including STI-1558 and COVI-MSC; and diagnostic test solutions, including COVIMARK.

Sorrento's commitment to life-enhancing therapies for patients is also demonstrated by our effort to advance a TRPV1 agonist, non-opioid pain management small molecule, resiniferatoxin ("RTX"), and SP-102 (10 mg, dexamethasone sodium phosphate viscous gel) (SEMDEXA), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, and to commercialize ZTlido (lidocaine topical system) 1.8% for the treatment of postherpetic neuralgia (PHN). RTX has been cleared for a Phase II trial for intractable pain associated with cancer and a Phase II trial in osteoarthritis patients. Positive final results from the Phase III Pivotal Trial C.L.E.A.R. Program for SEMDEXA, its novel, non-opioid product for the treatment of lumbosacral radicular pain (sciatica), were announced in March 2022. ZTlido was approved by the FDA on February 28, 2018.

For more information visit http://www.sorrentotherapeutics.com.

Forward-Looking Statements

This press release and any statements made for and during any presentation or meeting concerning the matters discussed in this press release contain forward-looking statements related to Sorrento and its subsidiaries under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include statements regarding the potential timing of crediting the Dividended Scilex Stock to customers' accounts by the brokerage firms, any early expiration of the restrictions on transfer on the Dividended Scilex Stock, Sorrento's ability to operate and grow its business, Sorrento's liquidity following its previously announced debtor-in-possession financing (the "DIP financing"), Sorrento's ability to safeguard its business operations and protect and maximize value for stakeholders, Sorrento's long-term objectives and commercialization plans, future opportunities for Sorrento, Sorrento's future business strategies, the expected cash resources of Sorrento and the expected uses thereof; Sorrento's current and prospective product candidates, planned clinical trials and preclinical activities and potential product approvals, as well as the potential for market acceptance of any approved products and the related market opportunity; statements regarding ELYXYB, SP-102 (SEMDEXA), SP-103, SP-104 or any of Sorrento's product candidates, if approved by the FDA; Sorrento's development and commercialization plans; and Sorrento's products, product candidates, technologies and prospects.

Risks and uncertainties that could cause Sorrento's actual results to differ materially and adversely from those expressed in our forward-looking statements, include, but are not limited to: Sorrento's ability to enforce on its arbitration award in the Cynviloq Arbitration, general economic, political and business conditions; risks related to the ongoing COVID-19 pandemic; the risk that the potential product candidates that Sorrento develops may not progress through clinical development or receive required regulatory approvals within expected timelines or at all; risks relating to uncertainty regarding the regulatory pathway for Sorrento's product candidates; the risk that Sorrento will be unable to successfully market or gain market acceptance of its product candidates; the risk that Sorrento's product candidates may not be beneficial to patients or successfully commercialized; the risk that Sorrento has overestimated the size of the target patient population, their willingness to try new therapies and the willingness of physicians to prescribe these therapies; risks that the results of the Phase 2 trial for SP-103 or Phase 1 trials for SP-104 may not be successful; risks that the prior results of the clinical trials of SP-102 (SEMDEXA), SP-103 or SP-104 may not be replicated; regulatory and intellectual property risks; and other risks and uncertainties indicated from time to time and other risks set forth in Sorrento's filings with the SEC, and relating to the voluntary proceedings under Chapter 11 in the Bankruptcy Court (the "Chapter 11 Cases"), Sorrento's ability to continue operating in the ordinary course while the Chapter 11 Cases are pending, the timing and outcome of the Chapter 11 Cases, Sorrento's ability to obtain timely approval by the Bankruptcy Court of the motions filed in the Chapter 11 Cases and any effects of the Chapter 11 Cases on the enforcement of the arbitration award in the Cynviloq Arbitration and Sorrento's ability to comply with the restrictions imposed by the terms and conditions of the DIP financing. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake no obligation to update any forward-looking statement in this press release except as may be required by law.

Contacts:

For Sorrento Therapeutics, Inc.

Media ContactThe Levinson Group212-202-2754Email: sorrento@tlgcommunications.comWebsite: http://www.sorrentotherapeutics.com

For the Official Committee of Equity Security Holders

CounselGlenn Agre Bergman & FuentesPhone: 212-970-1600Email: GABFsorrentoteam@glennagre.com

Sorrento and the Sorrento logo are registered trademarks of Sorrento Therapeutics, Inc.

G-MAB, DAR-T, Seprehvec, SOFUSA, COVI-MSC, COVIMARK, Fujovee and Ovydso are trademarks of Sorrento Therapeutics, Inc.

SEMDEXA (SP-102) is a trademark of Semnur Pharmaceuticals, Inc. A proprietary name review by the FDA is planned.

All other trademarks are the property of their respective owners.

Cision

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SOURCE Sorrento Therapeutics, Inc.

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Sorrento Therapeutics, Inc.'s Bankruptcy Court Orders Brokerage Firms to Credit Dividended Scilex Stock to Customers' Accounts and Sorrento Advises...

Influencer, entrepreneur, and self-help guru Tai Lopez is having a very strange year. The usually loud and self-centered 46-year-old, well known for his videos showcasing his sports cars, mansions, and bookshelves, has gone uncharacteristically quiet on his social media save for YouTube and Instagram, where he continues to push self-help podcasts and book reviews. So, whats going on?

Lopezs last post on Twitter roughly two months ago announced the sad news of his best friends passing. While its undoubtedly tragic to lose a loved one and certainly a valid reason to take a social media hiatus the loss isnt the only explanation as to why Lopezs posting has diminished.

On March 2, the Wall Street Journal reported that Lopezs company, Retail Ecommerce Ventures, LLC, was struggling to stay afloat and seeking legal assistance from Kirkland and Ellis, the same law firm working with Celsius Network and Voyager Digital in their respective bankruptcy cases.

There has been no update since.

Lopez started Retail Ecommerce Ventures with fellow multimillionaire Alex Mehr. Throughout 2020 to 2022, Lopez boasted about his acquisitions, which included bankrupt companies like RadioShack, Pier1, Franklin Mint, and Modells. However, Lopez has refrained from discussing his business ventures in the past year and has shifted his focus to monetizing his audience through his 67 Step program and answering questions related to energy levels.

Meanwhile, his business partner Mehr has deleted his Instagram profile and hasnt posted on Facebook for nearly three years.

Many of the duos acquisitions, which are former retail brick-and-mortar stores transitioned into ecommerce companies, have once again fallen on hard times.

Pier1 Imports has gone from a home furniture and decoration chain to a seller of fragrances; The Franklin Mint has moved on from selling painted coins to hats, mugs, and sports memorabilia, and RadioShack once a major electronics retailer in the US, attempted and failed to rebrand as a web3 company.

Read more: How wire fraud, not securities violations, lands crypto criminals in prison

RadioShack may have been Lopezs most successful venture into failed-business acquisitions. Its Twitter account quickly gained a substantial following due to provocative posts and trolling of critics. Unfortunately, two weeks after FTXs collapse, the account fell silent and hasnt been active since.

The electronics chain, which pinned its hopes on becoming a decentralized exchange and even spun up a token on the Binance Smart Chain, has shuttered RadioShack.org. Its crypto token, RADIO, has plummeted from a high of $0.037 to $0.00065 a loss of 98%.

So while its impossible to say if Lopez or Retail Ecommerce Ventures will be bankrupt soon, its quite clear that all of his acquisitions are struggling. Not to mention, Lopezs pleas for people to contact him about selling their companies doesnt inspire confidence, as one online commentator noted.

Got a tip? Send us anemailorProtonMail.For more informed news, follow us onTwitter,Instagram,Bluesky, andGoogle News,or subscribe to ourYouTubechannel.

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Failing ventures and Twitter hiatus spark Tai Lopez bankruptcy ... - Protos

HIGHLAND PARK, Mich. (WXYZ) Highland Park city officials agreed to settle a lawsuit brought by a couple whose building the city seized in 2020, then offered to return in exchange for two new police cars.

The city agreed to pay $300,000 to settle the suit, admitting to no wrongdoing.

The settlement, recommended by Mayor Glenda McDonald and approved by the city council in March, comes as the city teeters on the edge of bankruptcy, struggling to provide basic city services.

RELATED: Highland Park seized their building; the price to get it back was 2 new police cars

This never should have happened, this does not happen in America, said attorney Marc Deldin, who represented the Bloomfield Hills couple whose building was seized. This doesnt happen anywhere else in Michigan, only in Highland Park.

As 7 Action News first revealed last year, Highland Parks then-Mayor Hubert Yopp and city attorney Terry Ford seized the 13,000 square former church in 2020. Its owners were using the building to grow medical marijuana.

The husband and wife had secured a license to grow it, but Yopp claimed it was an illegal drug operation. Criminal charges were never filed.

According to the buildings owners, the city offered to return the building in exchange for two new police cars.

RELATED: Highland Park to return seized building after asking for new police cars in exchange

The offer, spelled out in court records and e-mails, said the city would return the building after receiving two vehicles totaling nearly $70,000.

The buildings owners refused.

A day after 7 Action News reported on the seizure, the city returned the building to its owners.

In March, the city settled the lawsuit filed by the couple whose building was seized, admitting to no wrongdoing and agreeing to pay them $300,000.

In a city starved of resources, it could go a long way, said Ken Bates, a Highland Park resident and former city council member.

Today, the city is staring down bankruptcy and remains on the hook for a $24 millionwater bill it cant afford to pay.

We could use equipment from our fire department, equipment for our police department, road repair equipment, DPW equipment, programming for residents, children and seniors, Bates said. Every dollar counts.

City officials say their insurance carrier is picking up half the cost of the settlement, leaving the Highland Park on the hook for $150,000.

Attorney Marc Deldin says with a new mayor and interim police chief, hes hopeful this sorry and costly chapter in the citys history wont repeat itself.

I hope the people of Highland Park continue putting in quality officials, Deldin said. They keep the police chief and they dont go back to how things used to be.

Reached for comment, former Mayor Yopp said the city was still right to have seized the building.

Contact 7 Investigator Ross Jones at ross.jones@wxyz.com or at (248) 827-9466.

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Facing bankruptcy, Highland Park settles lawsuit over seized ... - WXYZ 7 Action News Detroit

New Orleans

Greg Guidry gave thousands to archdiocese before ruling in favor of New Orleans church in case involving nearly 500 clergy sexual abuse victims

Sat 29 Apr 2023 09.09 EDT

A federal judge overseeing a bankruptcy filing from the USs second-oldest Roman Catholic archdiocese has recused himself from the case amid scrutiny of his donations to the church as well as his close professional relationship with an attorney representing archdiocesan affiliates in insurance disputes.

Greg Guidry, who was appointed to the judicial bench at New Orleanss federal courthouse by the Donald Trump White House in 2019, issued an order after 8pm on Friday recusing himself from a role handling appeals in a contentious bankruptcy involving nearly 500 clergy sexual abuse victims.

It came a week after the Associated Press reported that he had donated tens of thousands of dollars to the archdiocese before consistently ruling in favor of New Orleanss Catholic church during its Chapter 11 bankruptcy filing. And Guidrys ruling came hours after the Guardian had joined the AP in asking questions about a lawyer who was involved in making those donations while his firm defended archdiocesan-related ministries such as assisted living homes and the church itself as an employer in medical malpractice lawsuits.

I do not believe [recusal] is mandated, and no party has filed a motion to [recuse] me, Guidrys order read. However, balancing my duty to decide the case with my duty to consider self-recusal if appropriate, I have decided to recuse myself from this matter in order to avoid any possible appearance of personal bias or prejudice.

Guidrys order on Friday marked a stark reversal of course from just a week earlier, when he told attorneys involved in the bankruptcy case that a federal judiciary committee on codes of conduct had approved his continuing to handle appeals related to the case despite his giving nearly $50,000 to New Orleans-area Catholic charities from leftover contributions he received after serving 10 years in the elected position of Louisiana state supreme court justice.

It also seems likely to throw a bankruptcy case which has been ongoing since 1 May 2020 into disarray because of a federal legal precedent subjecting every ruling in a matter by a recused judge to be potentially reviewed and nullified.

Bankruptcy court records show that the campaign finance committee chairperson who greenlighted Guidrys donations to the New Orleans archdiocese which serves a half-million Catholics a prominent local attorney named John Litchfield had been paid at least $80,000 directly from the local church. Litchfield told the Guardian late Friday morning that an associate at his firm had landed his office work defending some archdiocesan affiliates mainly nursing homes or other senior living centers from medical malpractice claims.

But Litchfield insisted his firm had steered well clear of the most contentious claims at the center of the bankruptcy: those of many people who claimed to have been molested as children by Catholic priests and deacons. And he argued that Guidry could retain the impartiality required of federal judges despite his support of the archdiocese and Litchfields business with the church.

If Greg didnt think hed be fair, hed recuse himself, said Litchfield, who acknowledged on Friday in his interview with the Guardian that the AP had also just contacted him about his relationship with Guidry. I know Greg Guidry. I know him well. And hes as straight as they come.

Late Friday morning, University of Richmond law professor Carl Tobias said he believed Guidry should recuse himself when Litchfields relationship to Guidry was described to him, citing a law requiring federal judges to avoid even the appearance of a conflict of interest.

It does sound to me like there are enough connections between the judge and the church and the counsel to at least ask that question about whether Guidry should recuse himself, Tobias said. Thats a legitimate question to ask.

Meanwhile, legal ethics professor Kathleen Clark told the AP: The public shouldnt have to rely on a judges personal certainty about his own rectitude. She added that Guidrys initial resistance to recusal was misguided and ethically blind.

Most of the gifts to the church by Guidry which the AP first reported last week $36,000 came in the months after the archdiocese asked New Orleanss federal bankruptcy court for protection from creditors while it reorganized its financial books as it was faced with a wave of sexual abuse lawsuits as well as activity restrictions associated with the Covid-19 pandemic.

Newsletters issued by the archdioceses charitable arm even recognized Guidry and his wife among its donors for separate, private and unspecified contributions in 2017.

Once assigned to handle appeals in the bankruptcy case, Guidry denied a request to unseal some secret church documents outlining how archdiocesan officials handled clerics suspected of sexually abusing children, including more than 80 priests and deacons who the local church itself acknowledges are strongly suspected of preying on minors.

Guidry recently upheld a financially ruinous $400,000 fine against local lawyer Richard Trahant, who represents clergy abuse victims and was accused of violating a confidentiality order when he warned a local principal that his school was employing a priest who admitted to previously sexually molesting a teenage girl. He also upheld the expulsions of four of Trahants clients from a committee of clerical sexual abuse survivors who are involved in the bankruptcy after word of his warning to the local school principal who, coincidentally, is Trahants cousin made the news.

Furthermore, in addition to the opinion from the judiciary committee which Guidry cited when he initially indicated he would not recuse himself, the judge said in writing that he would stay on the case after seeking informal advice from federal appellate court judge Jennifer Walker Elrod about what to do. Elrod, meanwhile, is scheduled next week to hear an appeal from one of the expelled committee members who was represented by Trahant.

Guidry at one point provided pro bono services and served as a board member for the New Orleans archdioceses charitable arm, which was involved in at least one multimillion-dollar settlement to victims beaten and sexually abused at two local Catholic orphanages. Two of Trahants clients who were ousted from the committee at the center of the appeal which Elrod is scheduled to hear were abused at one of those archdiocesan orphanages in Marrero, a suburban area of New Orleans.

Guidry joins several of his colleagues in New Orleanss federal judiciary who have recused themselves from the bankruptcy or related litigation, illustrating the multitude of links shared by the regions legal establishment and the local archdiocese.

One of those judges previously worked as the archdioceses general counsel and is married to a former US senator, David Vitter. A second has served on a nonprofit which supports numerous archdiocesan ministries, and another has acknowledged a role in behind-the-scenes media relations campaigns that executives of the National Football Leagues New Orleans Saints team helped the archdiocese mount after prominent media reporting on church sexual abuse cases in 2018 and 2019.

The Guardian asked Guidry, through a US federal courts spokesperson, whether he had told the judiciary committee about either his role with the orphanages or his relationship with Litchfield. The spokesperson replied with Guidrys motion to recuse himself.

Guidrys recusal comes as federal judges relationships with parties who have business before their courts are being examined even at the highest levels.

ProPublica recently reported the close friendship between Clarence Thomas, the senior conservative on the US supreme court, and the Republican megadonor Harlan Crow.

Without declaring them, Thomas received from Crow extensive gifts including luxury travel and resort stays. Crow also bought a home in which Thomass mother lives and donated money to groups connected to Ginni Thomas, the justices far-right activist wife.

Thomas and Crow have denied wrongdoing.

On Tuesday, Politico reported that another conservative supreme court justice, Neil Gorsuch, pocketed up to $500,000 from a property sale shortly after joining the court but did not disclose that the buyer was the chief executive of a law firm with business before the court.

Gorsuch has not commented while the executive at the law firm has denied wrongdoing.

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Judge in archdiocese bankruptcy case recuses himself over donations scandal - The Guardian US

Revlon Inc. will emerge from bankruptcy under new ownership and a new board of directors that includes former executives from Bloomin Brands Inc., Sephora and Walgreens Boots Alliance Inc.

The reorganized beauty products companysnew board was selected byGlendon Capital Management LP, King Street Capital Management LP, Angelo Gordon & Co. and Nut Tree Capital Management LP, lenders to the businessthat are taking control in chapter 11.

Revlons bankruptcy ended nearly four decades of ownership bybillionaire financier Ronald Perelman, who bought the company in 1985. It sought protection from creditors last year as it faced a heavy debt load, inflation and supply-chain pressures.

Debra Perelman, his daughter, has been Revlons chief executive officer. She will remain CEO as well as a board memberas itpasses to new owners.

Leading the new board as executive chair will be Elizabeth Smith, former CEO of restaurant chain operator Bloomin Brands, owner of dining concepts that include Outback Steakhouse. Ms. Smith is also former chair of the Federal Reserve Bank of Atlanta, and former president of Avon Products Inc. She also worked for 14 years at Kraft Foods Inc., ultimately serving as president of its U.S. beverages and grocery sector.

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Ms. Smith currently serves on the boards of Hilton Worldwide Holdings Inc. and Authentic Brands Group LLC, and left the Bloomin board earlier this year.

Its no secret that the company has been under-resourced and burdened with a balance sheet with too much debt, Ms. Smith told WSJ Pro Bankruptcy. For the first time in years, Revlon will have the resources to reclaim its full potential.

Revlon survived the worst of the Covid-19 pandemic, only to be driven to bankruptcy by supply-chain disruptions and inflationary pressures. Itis expected to emerge from bankruptcy with $2.7 billion less debt, leaving roughly $1.5 billion of debt outstanding.

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The New York-based company will no longer trade publicly. The equity interests of Mr. Perelman and otherminority shareholders were wiped out in the chapter 11 case.

Other members of the new Revlon board will include: Martin Brok, former CEO of Sephora and a former regional president for Starbucks Corp. ; Timothy McLevish, former chief financial officer at Walgreens; Hans Melotte, a former executive at Johnson & Johnson and at Starbucks, where his jobs included chief supply chain officer; and Paul Pressler, chairman of eBay Inc. and former CEO of Gap Inc. Mr. Pressler previously served on the boards of Avon, Davids Bridal Inc. and Gap.

Ms. Smith said the new Revlon directors are considered independent, unaffiliated with thelendergroup recapitalizing the business.

Holly Kim,

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Write to Becky Yerak at becky.yerak@wsj.com

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Revlon Taps New Directors as Lenders Take Control in Bankruptcy - The Wall Street Journal

Eric W. Lupher| Detroit Free Press

Once again, the City of Highland Park is having financial troubles. This time, a long-running lawsuit with the Great Lakes Water Authority (GLWA) has run its course, and the court has ruled that the city owes the water authority an estimated $24 million for unpaid services.

Conflicts between the Highland Park and the water authority, including its predecessor the Detroit Water and Sewerage Department (DWSD), have gone on for decades, because Highland Park chronically underpaid for sewage treatment services. Those problems continued after GLWA was created, and it became more apparent that the other communities were bearing the cost of Highland Parks actions.

The Michigan Court of Appeals ruled that Highland Park had to pay these charges, amounting to more than twice what the city collects annually in property and income tax revenues and more than four times the citys annual water and sewer fund revenues.

Highland Park's combined general fund and enterprise budget is roughly $20 million. It finished the 2021-22 fiscal year with $4 million in cash reserves. It does not have the cash on hand to pay back this debt. Repurposing existing revenues for this purpose would draw from general government, public safety, public works and other services that arguably already are underresourced.

Facing this large debt, Highland Park asked the state to initiate a review of the citys finances pursuant to the states emergency manager law. A week later, the city sought to skip the legal process and jump straight to filing for municipal bankruptcy.

Perhaps Highland Park leaders think their problems are like what Detroit was facing a decade ago. But there are significant differences. Detroits fiscal decay and years of poor policy choices led to unbalanced budgets, impeded its cash flow, caused it to run up years of operating deficits and created long-term debts the city was unable to manage.

Highland Parks financial condition is much better. The city has maintained balanced budgets, stashed more than a third of its operating expenditures in cash reserves, and worked to pay down its long-term debt.

Instead of looking at Detroits 2013 bankruptcy as a way forward, Highland Park officials might consider the state actions in 2016 that addressed the long-standing financial problems that faced Detroit Public Schools (DPS). It owed over $1.7 billion in notes and loans that were backed by the state and other school districts.

When governments borrow from private entities, it comes with the governments promise to repay the borrowed amounts with interest. The financial history and credit worthiness of the government dictates the interest rates charged for borrowing.

When local governments borrow from the state or regional governments, it is the other governments, and ultimately state taxpayers, who bear the risk and absorb the cost if payments are not made.

Detroit filed for bankruptcy with most of its debt owed to investors and pensioners. Much of its debt relief came from shorting investors who knew that the city had experienced decades of decline and was a financial risk.

DPS experienced the same socio-economic declines and financial struggles and by 2016 was saddled with debt for delinquent payments for pension and retiree health care, the cost of early retirement incentives, and the repayment of cash flow borrowing, among other things. Because Michigan operates the teacher pension system and provided funding for the cash flow borrowing, it was the state, other school districts, and taxpayers on the hook for most of DPS debts.

The different nature of the debt dictated an approach different from Detroits bankruptcy.

The adopted debt relief plan did not absolve DPS of its debt, but crafted a solution in which the district repays the debt, but the state School Aid Fund plays a larger role in funding education while those payments are being made.Highland Parks unpaid sewerage billings are more akin to DPS problems than the City of Detroits. GLWA has floated the money while Highland Park wrangled over its sewerage costs. As a result, GLWA had fewer resources to invest in infrastructure improvements.

If the city doesnt have the money and bankruptcy is not appropriate, what are the alternatives?

The Wayne County Circuit Court could impose a judgment levy. This is a poor option. Highland Park property taxpayers already pay the eighth highest property tax rate in the state. While there is an element of fairness to this option those that incurred the debt must pay for it adding to the already high tax burden could further lessen any incentives to locate in Highland Park.

Issuing a bond to finance the debt would spread the cost over several years, with the effect of shifting the burden from past generations to future generations. Taking on more debt for operating costs would further burden future generations with the high cost of being in Highland Park for services provided in earlier years.

State government could foot the bill. Surplus funding from the previous fiscal year and federal funding is being doled out as the Legislature crafts a budget for the next fiscal year. This has taxpayers throughout the state foot the bill for Highland Parks debt.

The governor has proposed that GLWA repurpose a 2022 $25 million clean water grant from federal funding to make the payment on Highland Parks behalf. Because it is federal funding, all U.S. taxpayers would be absorbing the cost. This option doesnt really make GLWA whole. The dispute would be settled on paper. Highland Park would be free from the debt, but with less to spend on improvements to the regions water and sewerage infrastructure.

There are no good options. Each comes with tradeoffs with respect to who ultimately bears the cost of repaying the debt and the ability to pay.

Whatever solution is adopted, it is unlikely to address the underlying issues. Highland Park is a shrinking city that is bleeding people and tax base. Michigan, and southeast Michigan in particular, is struggling to improve the regions water and sewerage infrastructure. Both need to be addressed.

Eric W. Lupher is president of the nonpartisan research group Citizens Research Council of Michigan. Contact the Free Press opinion page: letters@freepress.com.Become a subscriber at Freep.com.

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Opinion: Highland Park shouldn't declare bankruptcy over water debt - Detroit Free Press

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In Kolkata, India's new bankruptcy law is put to the test - Financial Times

A federal judge overseeing the New Orleans Roman Catholic bankruptcy recused himself in a late-night reversal that came a week after an Associated Press report showed he donated tens of thousands of dollars to the archdiocese and consistently ruled in favor of the church in the case involving nearly 500 clergy sex abuse victims.

U.S. District Judge Greg Guidry initially announced hours after the AP report that he would stay on the case, citing the opinion of fellow federal judges that no reasonable person could question his impartiality. But amid mounting pressure and persistent questions, he changed course late Friday in a terse, one-page filing.

I have decided to recuse myself from this matter in order to avoid any possible appearance of personal bias or prejudice, Guidry wrote.

Read the full AP invesigation:

The 62-year-old jurist has overseen the 3-year-old bankruptcy in an appellate role, and his recusal is likely to throw the case into disarray and trigger new hearings and appeals of every consequential ruling hes made.

But legal experts say it was the only action to take under the circumstances, citing federal law that calls on judges to step aside in any proceeding in which their impartiality might reasonably be questioned.

This was a clear and blatant conflict that existed for some time, said Joel Friedman, a longtime legal analyst in New Orleans who is now a law professor at Arizona State University. It creates the exact problem the rules are designed to avoid, the impression to the public that hes not an impartial decisionmaker.

Guidrys recusal underscores how tightly woven the church is in the citys power structure, a coziness perhaps best exemplified when executives of the NFLs New Orleans Saints secretly advised the archdiocese on public relations messaging at the height of its clergy abuse crisis.

APs review of campaign-finance records showed that Guidry, since being nominated to the federal bench in 2019 by then-President Donald Trump, gave nearly $50,000 to local Catholic charities from leftover political contributions from his decade serving as a Louisiana Supreme Court justice. Most of that giving, $36,000, came in the months after the archdiocese sought Chapter 11 bankruptcy protection in May 2020 amid a crush of sexual abuse lawsuits.

Guidry also served on the board of Catholic Charities, the archdioceses charitable arm, between 2000 and 2008, as the archdiocese was navigating an earlier wave of sex abuse lawsuits.

In the bankruptcy, Guidry frequently issued key rulings that altered the momentum of the bankruptcy and benefited the archdiocese.

Just last month, he upheld a $400,000 sanction against Richard Trahant, a veteran attorney for clergy abuse victims who was accused of violating a sweeping confidentiality order when he warned a local principal that his school had hired a priest who admitted to sex abuse. He also rebuffed at least one request to unseal secret church documents, part of a trove of records detailing clergy abuse in New Orleans going back decades.

Guidry referred the potential conflict to the Washington-based Committee on Codes of Conduct, which noted that none of the charities he donated to has been or is an actual party in the bankruptcy.

It also noted that Guidrys eight years on the board of Catholic Charities ended more than a decade before the bankruptcy and that his church contributions amounted to less than 25% of the campaign funds he had available to donate.

Based upon that advice and based upon my certainty that I can be fair and impartial, I have decided not to recuse myself, Guidry told attorneys in the case on April 21.

But it was not clear what details Guidry shared with the committee, and he refused to release its advisory opinion. The opinion also raised eyebrows because one of the judges Guidry consulted on the potential conflict, Jennifer Walker Elrod, is scheduled to hear an appeal from the bankruptcy next week for the 5th U.S. Circuit Court of Appeals.

We have no reason to rely on this secret opinion because we have no idea what the analysis is, said Kathleen Clark, a legal ethics professor at Washington University in St. Louis, adding it was utterly reasonable to question Guidrys ability to be impartial under these circumstances.

The public shouldnt have to rely on a judges personal certainty about his own rectitude, Clark added. The fact that he would even make this assertion shows how misguided and ethically blind this judge is.

Charles Hall, a spokesman for the Administrative Office of the U.S. Courts, said Guidry had no comment beyond the recusal order.

James Adams, a creditor in the bankruptcy who alleges he was abused by a priest as a fifth grader in 1980, says the judges recusal was long overdue.

Like the church, some federal judges will often do the right thing only after the press begins to investigate and question them, he said. Inflated ego and arrogance can be a dangerous side effect of putting on a black robe.

___

Mustian reported from New York. Contact APs global investigative team at Investigative@ap.org.

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Judge in Catholic bankruptcy recuses over church donations - The Associated Press

FuzzMartin

Whittaker, Clark & Daniels, Brilliant National Services, L.A. Terminals, and Soco West filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the District of New Jersey on Wednesday. The equity of the four companies had been acquired by an indirect subsidiary of Berkshire Hathaway (NYSE:BRK.B) (NYSE:BRK.A) in December 2007.

Although the companies had ceased operations in 2004 and sold all their operating assets before the acquisition, they still faced liabilities related to asbestos, talc, and environmental claims at the time of the acquisition, Berkshire Hathaway (BRK.B) said in a statement Thursday.

At the time of the filing, the firms' consolidated liabilities were estimated at $1B-$10B and consolidated assets were estimated at $100M-$500M, according to the filing.

"No Berkshire (BRK.B) company ever operated, or had any involvement in, the manufacturing and chemical operations that gave rise to the companies liabilities, and no Berkshire insurer issued it any insurance in connection with the acquisition," the company said.

In 2010, a Berkshire Hathaway (BRK.A) unit assumed asbestos and pollution risks held by CNA Financial (CNA) for $2B. Then the next year, it agreed to take on $3.5B in potential asbestos liabilities from AIG (AIG) in exchange for ~$1.65B payment.

The rest is here:

Four companies indirectly owned by Berkshire Hathaway file for bankruptcy (NYSE:BRK.B) - Seeking Alpha