bankruptcy court


Nursing home owner must face NLRB case despite bankruptcy protections

  • May 11, 2023

A federal agency can proceed litigating allegations of unfair labor practices against the operator of several Connecticut nursing homes that declared bankruptcy in 2013.

The ruling from the 3rd Circuit Court of Appeals allows the National Labor Relations Board to move against 710 Long Ridge Road Operating Company II LLC, which has been in and out of bankruptcy and other courts for more than a decade. Court documents emphasize the “complex” nature of the case, but the ruling from a three-judge panel on the Circuit Court found the question “before [them] simple” before noting that the preliminary injunction filed against the NLRB was incorrect. That leaves the agency free to pursue its case against the owner, despite the bankruptcy proceedings. 

In June 2012, HealthBridge Management LLC, which managed several nursing homes owned by 710 Long Ridge Road,  announced that it had reached an impasse with unions representing workers at five nursing homes that operated under separate but similar collective bargaining agreements, according to court documents and local reporting. The unions represented approximately 700 employees at Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. The agreements were in effect from Dec. 31, 2004, to March 16, 2011. 

The management company then made its “Last, Best, and Final” offer on June 17, 2012, which was rejected by the union as being “unfair to the employees,” according to the Westchester & Fairfield County Business Journals. Employees went on strike on July 3, 2012, after which the company hired replacement workers, court documents noted. 

In February 2013, the US Supreme Court ruled against the company that wanted to delay a lower court ruling ordering it to reinstate the striking workers. The case took another twist about a year later

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Bankruptcy Battle Breaks Out Over Greenwich Village Dev Site

  • May 8, 2023

UPDATED April 27, 10:50 p.m.: George Filopoulos gave up on a Greenwich Village building, but the troubled loans left behind have triggered a bizarre legal fight over the property, which is now being offered for sale as a condominium development site.

The drama began when the longtime real estate investor’s LLC was notified in August 2020 that it had defaulted its $9.3 million first mortgage at 307-309 Sixth Avenue.

The LLC — in which Filopoulos says he owned a 10 percent interest in separate from his firm, Metrovest Equities failed to repay the loan at its maturity date and lender Castellan Capital filed to foreclose.

The case laid quiet during the pandemic and in December of 2021 Castellan sold its loan, according to property records. Filopoulos then transferred its interest in the property in May 2022, according to an attorney for his firm. A court filing does not say who took control of the ownership LLC. Paperwork for the entity was signed by a person named William Schneider, who in November filed project plans for a seven-story, 39-unit building with ground-floor retail and community space.

The judge in the foreclosure case ruled in June that the LLC’s debt had grown to about $15 million, and a foreclosure sale was scheduled for Dec. 14.

But on the eve of the auction, another stakeholder went to bankruptcy court to prevent it from going through.

William Rainero, whose family sold Filopoulos’ LLC the property in 2017, said in court papers that he had provided the buyer a $5 million mortgage to close the $17 million deal. That loan is in the second position behind the one originated by Castellan.

Rainero argued in court papers that the new owner was conspiring to wipe him out by agreeing to hand the property back to

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Women suing J&J speak out after company’s failed legal maneuver

  • March 7, 2023

In the long legal fight over allegations that talc in Johnson & Johnson baby powder is linked to ovarian cancer, plaintiffs got an incremental victory on Monday: A federal appeals court rejected J&J’s effort to move more than 38,000 lawsuits to bankruptcy court.

Plaintiff Deborah Smith’s case was held up for 15 months because of the attempted maneuver, a legal strategy colloquially known as the Texas Two-Step. J&J’s approach relied on the creation of a subsidiary called LTL Management that could take on the liability for talc-related legal claims. Within days of its creation in 2021, LTL filed for Chapter 11 bankruptcy.

By that time, more than two years had passed since Smith filed her suit. The news of the Two-Step, she said, felt like “a slap in the face.”

“If that was someone in their family, would they drag it out like that?” Smith said. “It’s almost like they’re playing a waiting game to see how many people will just die or just give up fighting.”

Smith was diagnosed with ovarian cancer in 2003, she said, after her doctor discovered a tumor during a procedure to remove a uterine fibroid. She had two surgeries and three cycles of chemotherapy, she added, leading her hair to fall out in bunches. It never grew back properly, so Smith said she still wears wigs.

According to Smith’s suit, she used J&J’s baby powder as a feminine hygiene product to absorb sweat and keep her skin dry for more than 15 years. The suit says Smith also used Shower to Shower, a talc-based product formerly manufactured by J&J, until 2003. 

Smith’s lawsuit cites more than 25 published studies dating back to 1982 that evaluate a link between talc and ovarian cancer risk. The suit alleges that nearly all those studies document a

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In Momentous Win For Plaintiffs, Third Circuit Dismisses J&J Talc Bankruptcy

  • March 5, 2023

In a big win for plaintiffs suing over Johnson & Johnson’s baby powder, an appeals court dismissed a Chapter 11 talc case that had halted trials across the country.

On Monday, the U.S. Court of Appeals for the Third Circuit found that the subsidiary, LTL Management, which had a $61 billion funding agreement with Johnson & Johnson, was not in financial distress when it filed for bankruptcy in 2021. The ruling reverses a Feb. 25 decision by U.S. Bankruptcy Chief Judge Michael Kaplan of the District of New Jersey.

Federal Judge Thomas Ambro of the U.S. Third Circuit. Federal Judge Thomas Ambro of the Third Circuit.

“Good intentions—such as to protect the J&J brand or comprehensively resolve litigation—do not suffice alone,” Judge Thomas Ambro wrote in the unanimous opinion. “What counts to access the bankruptcy code’s safe harbor is to meet its intended purposes. Only a putative debtor in financial distress can do so. LTL was not.”

The ruling is a big win for plaintiffs alleging in nearly 40,000 talcum powder cases that Johnson & Johnson’s baby powder caused ovarian cancer or mesothelioma.

“The doors to the courthouse, which had been slammed shut by J&J’s cynical legal strategy, are once again open, as they should be,” wrote Leigh O’Dell, a partner at Montgomery, Alabama’s Beasley Allen who is co-lead plaintiffs counsel in the talc multidistrict litigation. “Given that, we will immediately seek to return these cases to their rightful venues in federal and state district courts, efficiently schedule and conduct trials, and establish the liability of Johnson & Johnson for the deaths and disease suffered by thousands of women.”

Chris Placitella of Cohen, Placitella & Roth in Red Bank, New Jersey, is liaison counsel in talc multidistrict litigation and represents mesothelioma clients. Placitella said he expected filing new complaints immediately, saying, “it’s over.”

“With all due respect to

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Military personnel in 3M earplug suit ask judge to dismiss company subsidiary’s bankruptcy claim

  • March 3, 2023

Current and former U.S. military members suing 3M over allegedly defective military earplugs have asked a U.S. judge to dismiss 3M subsidiary Aearo Technologies’ bankruptcy, accusing the company of using bankruptcy to shield itself from litigation, which has grown into the largest mass tort in U.S. history.

The servicemembers’ group said late on Thursday that Aearo’s Chapter 11 bankruptcy should face the same fate as the bankruptcy of a Johnson & Johnson-created subsidiary, which was used to settle lawsuits alleging J&J baby powder and other talc products caused cancer. A federal appeals court dismissed the bankruptcy strategy this week.

3M Co faces more than 230,000 lawsuits accusing it of selling defective earplugs that caused hearing loss for U.S. military members. The company has sought to settle those lawsuits through Aearo’s bankruptcy.


3M’s plan faltered when U.S. Bankruptcy Judge Jeffrey Graham in Indianapolis ruled that Aearo’s bankruptcy did not stop earplug lawsuits from proceeding against parent company 3M, which is not bankrupt. 3M is appealing that ruling.

Now the servicemembers suing want Graham to go a step further and end Aearo’s bankruptcy entirely. In a Thursday court filing, they cited a Monday ruling by the U.S. 3rd Circuit Court of Appeals in Philadelphia dismissing a bankruptcy case filed by J&J subsidiary LTL Management because neither J&J nor LTL were in “financial distress.”

J&J denies the cancer claims and is challenging the 3rd Circuit ruling.

U.S. military personnel suing 3M for allegedly <a href=defective earplugs have requested a judge dismiss a company subsidiary’s bankruptcy claim.”/

U.S. military personnel suing 3M for allegedly defective earplugs have requested a judge dismiss a company subsidiary’s bankruptcy claim. (REUTERS/Nicholas Pfosi/File Photo)

LTL, like Aearo, entered bankruptcy with an agreement that its non-bankrupt parent would fund a settlement of the lawsuits in bankruptcy.

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Bitcoin miner Core Scientific borrows $70 mln to replace bankruptcy lender

  • February 27, 2023
  • Judge also approves $6 million termination fee to initial lender group
  • Core Scientific says new loan offers better terms, more flexibility

(Reuters) – Bitcoin miner Core Scientific Inc received bankruptcy court approval on Wednesday to replace its existing bankruptcy lenders with a new $70 million loan provided by its largest junior creditor.

U.S. Bankruptcy Judge David Jones said at a court hearing in Houston that Core Scientific may end its agreement with a group of creditors that financed the start of its bankruptcy case and proceed with a new loan from financial services company B. Riley Financial Inc, which was owed $42 million when Core Scientific first filed for bankruptcy.

Jones also approved a $6 million termination fee to the lender group that is being replaced, overruling objections from Core Scientific’s equity holders and junior lenders who argued that the termination payment was too high.

Jones said the earlier bankruptcy loan was “incredibly expensive,” but that he had approved it because it was the best financing available at the start of Core Scientific’s bankruptcy. Invalidating the termination fee would invite debtors and creditors to second-guess loan agreements reached in the initial stages of future bankruptcy cases, Jones said.

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“My orders have to mean something,” Jones said. “The process is far more important than $6 million.”

Austin, Texas-based Core Scientific filed for bankruptcy in December with a $75 million loan in hand, but it said that it was open to better financing offers from other lenders.

The B. Riley loan was a better deal, even with the $6 million termination fee factored in, because it offers better financial terms and does not commit Core Scientific to a restructuring path chosen by its senior lenders, Core Scientific attorney Ronit Berkovich told Jones on Wednesday.

Jones’ approval

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Diocese bankruptcy firm publishes names, addresses of 142 sexual assault victims

  • February 23, 2023

The bankruptcy firm that represents the Diocese of Norwich on Thursday published the names and addresses of 142 clergy sexual assault victims in a federal court document that was publicly available online.

The document filing by Epiq Corporate Restructuring of New York City means that the names were available for about 21 hours even though all but one of the victims had been assured their names would not be released and the federal bankruptcy judge handling the case had ordered they remain anonymous.

The 142 people allege they were sexually assaulted by priests and other members of diocese and are seeking compensation in the diocese’s ongoing bankruptcy proceeding.

“This is just a horrible, horrible thing,’ said New London attorney Kelly Reardon, who represents 25 of the victims. ”These people had already been victimized. They don’t need their names published now. Someone is going to have to be held accountable for this.“

Reardon said that for many victims, few people know they were sexually assaulted.

“In many instance my clients have never told anyone but me,” she said.

Marci Hamilton, the CEO of Child USA and a University of Pennsylvania professor who studies the clergy abuse issue, has testified before a General Assembly study committee that people sexually assaulted by priests do not tell anyone what happened to them until age 52, on average.

On Friday night lead diocesan bankruoptcy attorney Louis DeLucia issued the following statement.

“In association with the bankruptcy filings, earlier today we learned of a clerical error on the part of Epiq Corporate Restructuring, which resulted in the names of some abuse survivors being published. The Diocese, in collaboration with the Committee representing the Diocese’s creditors, including abuse survivors, promptly filed a motion with the Bankruptcy Court to remove the names that were published in error, and

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Attorneys for diocese priest abuse victims seek to file own bankruptcy plan

  • February 16, 2023

The committee that represents 142 people who say they were sexually assaulted by priests and clergy in the Diocese of Norwich said Friday the diocese’s $29 million bankruptcy plan to compensate the victims is “woefully inadequate.”

The comment came as attorneys for the official Committee of Unsecured Creditors announced they would be taking the “extraordinary step” of seeking authority from a federal bankruptcy court judge to file an alternative plan of reorganization “in the hopes of providing all survivors fair and reasonable compensation” while bringing “some measure of accountability to the Norwich Diocese and the other implicated Catholic organizations.”

“While the $29 million in total proposed in the Diocese’s plan, standing alone, is admittedly a large sum of money, when shared among all of the survivors who suffered greatly as children and continue to suffer to this day, it is woefully inadequate,” said committee co-counsel, Eric Henzy.

Some of the victims could receive as little as $2,500, according to the diocese’s plan.

Ice Miller, the law firm representing the diocese, did not respond to a request for comment about the committee’s request to submit a competing plan.

The Roman Catholic diocese filed for bankruptcy in 2021 as it faced more than 60 lawsuits filed by men who say they were sexually assaulted as boys by Christian Brothers, staff and students at the diocese-run Mount Saint John Academy, a residential school for troubled boys in Deep River, from 1990 to 2002. Since the bankruptcy filing, 82 additional people, whose sexual assault allegations involved not only the school, but diocesan churches, have filed claims in the bankruptcy case.

Since the diocese filed for bankruptcy, it has received seven extensions giving it the exclusive right to file a bankruptcy. It negotiated with its insurance company, parishes, the committee representing victims and creditors

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