October 2022

Alex Jones arms for verdict fight with Sandy Hook parents

Alex Jones is not rushing into bankruptcy protection after a Connecticut jury ordered him to pay $965 million in defamation damages to eight Sandy Hook families last week, his attorney said on Monday.

“[T]here is simply no need for a bankruptcy filing until the appellate courts have handled these cases on appeal,” said Jones’ bankruptcy attorney Shelby Jordan, speaking not only of the eye-opening Connecticut verdict but the $49 million a Texas jury ordered Jones to pay in August to parents of a slain Sandy Hook boy Jones defamed. “Keep in mind that these judgments were obtained by barring almost all defensive testimony to the damage claims made and in particular allowing the jury to hear only one side of that evidence.”

The first post-verdict fight will come on Thursday where Jones will ask a Texas judge to apply the state law’s $750,000 limit on punitive damages in civil cases, and deny a claim by the Sandy Hook parents that they are exempt from the cap because of their severe emotional suffering.

The two sides couldn’t be further apart.

The parents of the slain Sandy Hook boy argue they’re entitled to the $45 million in punitive damages the jury awarded

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October 20, 2022 by ATTORNEY

Auto suppliers turn to bankruptcy to renegotiate contracts

Suppliers have so far been largely successful in obtaining pricing relief from automakers, according to attorneys and consultants involved in the discussions. But as suppliers intensify their efforts for price increases, and OEMs face a bleaker economic outlook and major supplier-related financial losses, it’s less of a guarantee who blinks first at the negotiation table.

The situation is not nearly as dire as the Great Recession of 2007-09, but suppliers across the tiers continue bearing the brunt of supply chain pain, and they are not afraid of pulling the bankruptcy card, according to Max Newman, attorney at Detroit-based Butzel Long who specializes in Chapter 11 proceedings.

“There have been threats of bankruptcy in connection with price increases, and there’s sort of an implicit threat of bankruptcy whenever a supplier is seeking a price increase because an OEM doesn’t just hand them out to anybody,” Newman said.

In the past few months, at least five automotive suppliers have filed for bankruptcy while others have moved to close plants in Michigan as supply chain volatility and inflation bloat the cost of doing business.

In many instances, suppliers are locked into contracts entered before the COVID-19 pandemic and supply crisis flipped the

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October 16, 2022 by ATTORNEY

3M’s Aearo scores quick appeal of bankruptcy court’s ruling on earplug MDL

(Reuters) – By the end of 2023, we should have a much better idea about whether companies facing vast mass torts exposure can use the bankruptcy system to sidestep multidistrict litigation in federal court.

On Wednesday, the 7th U.S. Circuit Court of Appeals granted a petition by 3M Co subsidiary Aearo Technologies LLC to review a bankruptcy court’s decision refusing to block MDL litigation against the parent company despite Aearo’s Chapter 11 bankruptcy.

The 7th Circuit order means that Aearo will not have to first challenge the ruling by U.S. Bankruptcy Judge Jeffrey Graham of Indianapolis in federal district court, which is usually the first stop for bankruptcy appeals. Instead, Aearo can tell the 7th Circuit directly why it believes that more than 200,000 combat veterans should not be permitted to continue litigating their claims against 3M for selling allegedly defective earplugs in an MDL in Pensacola, Florida.

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The 3rd Circuit, as you probably recall, is weighing a parallel case. That court heard oral arguments last month about whether the bankruptcy of a Johnson & Johnson subsidiary can halt nearly 40,000 claims that J&J’s talc products

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October 15, 2022 by ATTORNEY

Celsius execs withdrew millions before bankruptcy, court filings show

LONDON – Top executives at Celsius Network withdrew at least US$30 million (S$43 million) of cryptocurrencies in the month before suspending customer withdrawals from the platform, according to bankruptcy court documents filed by lawyers for the crypto lender in New York late on Wednesday.

Then chief executive officer Alex Mashinsky, co-founder Daniel Leon and chief technology officer Nuke Goldstein, and entities identified in the documents as their related parties, made a series of withdrawals in May totalling more than US$30 million, these filings allege. Transactions were denominated in Bitcoin, Ether, USDC, Celsius’ own CEL token and “wrapped” Bitcoin.

Mr Mashinsky withdrew about US$10 million in cryptocurrency over the course of May, the filing shows. Mr Leon withdrew about US$7 million; net of deposits, his withdrawals amounted to about US$3.1 million, the documents show. The calculations include withdrawals by entities and people related to the executives, as designated by Celsius advisers.

Mr Goldstein withdrew around US$13 million. Lawyers for Mr Goldstein told Bloomberg that net of deposits, the withdrawals attributed to the CTO and related parties totalled about US$559,000.

A Celsius representative did not immediately respond to an e-mail seeking comment. Neither Mr Mashinsky nor Mr Leon returned multiple

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October 10, 2022 by ATTORNEY

Kabbage files for bankruptcy as it faces PPP fraud probes

Kabbage files for bankruptcy as it faces PPP fraud probes

Online lender Kabbage was one of the biggest lenders in the first year of the Paycheck Protection Program, processing more than $7 billion in loans.

But for more than two years, the company has also been dogged by questions of whether it was too lax in approving loans that it should have known were fraudulent.

Facing numerous federal investigations into its PPP lending practices, Kabbage or, to be more accurate, the shell of what was once Kabbage, filed for bankruptcy this week.

Kabbage was acquired by American Express in the fall of 2020. The credit card giant took the online lender’s technology and many of its employees, but left behind the PPP loan portfolio, which would be handled by a holding company that now does business under the name KServicing.

READ MORE: A felon, an alleged drug dealer and a comic: How some who may be ineligible got PPP loans

That holding company disclosed in the filings that it is currently facing investigations into its PPP lending practices from the House Select Subcommittee on the Coronavirus Crisis, the Federal Trade Commission, the U.S. Small Business Administration and two U.S. Attorneys, working in conjunction with the U.S. Department of Justice.

The

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October 8, 2022 by ATTORNEY
October 2022
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