Mallinckrodt’s Second Bankruptcy ‘Flagrant’ Case of Bad Plan

Drugmaker Mallinckrodt Plc‘s return to bankruptcy, where it will substantially reduce payments to opioid claimants, comes after it fell short of overly optimistic projections from its first Chapter 11.

Opioid claimants will now see their $1.7 billion settlement fund established through Mallinckrodt’s first bankruptcy slashed to $700 million as a result of the flawed financial forecasts embedded in the company’s prior restructuring plan, which faced little formal pushback in court.

The proposed reduction in settlement funds will be “devastating” to opioid claimants, said Joseph Steinfeld, an opioid victim lawyer with ASK LLP.

The company’s Chapter 11 filing on Monday comes slightly more than a year after it emerged from its first bankruptcy with a deal resolving litigation from individuals and state and local governments that accused it of contributing to the national opioid crisis.

The first bankruptcy was supposed to be final. All corporate debtors are required to show a judge they can meet the obligations of their restructuring plans and are unlikely to restructure again, a standard known as “feasibility.” The bankruptcy code says a plan can be confirmed if it is “not likely” to be followed by further restructuring or liquidation.

Still, Chapter 11 refilings are

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September 4, 2023 by ATTORNEY

Corizon Reaches Bankruptcy Deal That May Allow It to “Profit at the Expense of Creditors”

Corizon Reaches Bankruptcy Deal That May Allow It to “Profit at the Expense of Creditors”
    • Leading prison health provider Corizon Health split last year and filed one company, called Tehum, into bankruptcy
    • Sources tell Insider the parties reached a tentative settlement of $30 million, a small fraction of the company’s debt
    • That deal could leave hospitals and hundreds of prisoners who claim they were harmed by Corizon with tiny settlements
    • Sen. Elizabeth Warren is now looking into Corizon’s use of a controversial legal maneuver called the Texas Two-Step

Corizon Health, once the nation’s largest prison healthcare provider, reached a tentative bankruptcy deal last week that could leave hundreds of prisoners with pennies on the dollar for their medical malpractice claims. 

If the settlement is approved, it would mean that Corizon’s owners succeeded in their use of a controversial financial maneuver called the Texas Two-Step. In a recent civil complaint, Isaac Lefkowitz, a company representative, said the Two-Step is used to “force plaintiffs into accepting lower payments.”

Sen. Elizabeth Warren has called Corizon’s use of the Two-Step “an alarming red flag.”

According to two people close to the negotiations, the settlement figure

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September 3, 2023 by ATTORNEY

Why RHOA’s Kim Zolciak and Estranged Husband Kroy Biermann May ‘Need to File for Bankruptcy’

Why RHOA’s Kim Zolciak and Estranged Husband Kroy Biermann May ‘Need to File for Bankruptcy’

Kim Zolciak-Biermann and Kroy Biermann’s biermann-split-again-after-calling-off-divorce/” data-ylk=”slk:divorce is back on;elm:context_link;itc:0″ class=”link “divorce is back on — and lawyer Neama Rahmani wouldn’t be surprised if the duo’s troubled finances are the reason for their split.

“There’s a lot that’s going on here, but obviously financial problems are one of the number one reasons why people do get divorced,” Rahmani exclusively told Us Weekly during a Tuesday, August 29, interview on the “Legally Us” podcast. “That [puts] a lot of pressure on relationships, so that may be one of the things that’s going on here behind the scenes.”

Rahmani, who is not working with Zolciak-Biermann, 45, or Biermann, 37, on their divorce, went on to note that he’s confused as to why the estranged couple hasn’t yet filed for bankruptcy amid their money troubles.

“I’m really surprised at how they’ve handled this, both in terms of the family side and the potential bankruptcy,” he told Us. “It seems like these two need to separate, need to file for bankruptcy, really start their life over — both their personal and professional life, because everything just seems like a mess right now.”

Why RHOA’s Kim Zolciak and Estranged Husband Kroy Biermann May ‘Need to File for Bankruptcy’

Kim Zolciak, Kroy Biermann Getty Images(2)

Earlier

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August 31, 2023 by ATTORNEY

Bondholders, bankruptcy trustee seek slowdown in Mercy hospital sale


Signs direct Mercy Iowa City patients to areas in the hospital, which may be sold to the University of Iowa. The hospital’s bondholders and creditors, however, asked a judge this week to slow down the sale to give them time for due diligence and to maximize the “value of the sale.” (Jim Slosiarek/The Gazette)
Signs direct Mercy Iowa City patients to areas in the hospital, which may be sold to the University of Iowa. The hospital’s bondholders and creditors, however, asked a judge this week to slow down the sale to give them time for due diligence and to maximize the “value of the sale.” (Jim Slosiarek/The Gazette)

IOWA CITY — Although Mercy Iowa City wants an expeditious sale of its assets — after the 150-year-old hospital filed for Chapter 11 bankruptcy this month — its bondholders and creditors this week asked a judge to tap the brakes to give them time for due diligence and to maximize the “value of the sale.”

“(Mercy’s) proposed bidding procedures are premised upon an exceptionally abridged timeline,” the hospital’s primary bondholders argued in court filings Thursday, referencing Mercy’s request for a Sept. 19 deadline for other bids to compete with the University of Iowa’s $20 million opening offer.

“The timeline under the proposed bid procedures is so compressed that it could potentially deter interested parties from participating in the sale process and have a chilling effect.”

Chief Judge Thad Collins on Friday agreed to move a hearing on the timeline and sale process from Aug. 31 to

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August 28, 2023 by ATTORNEY

Liquor license to be sold in bankruptcy of closed Cannon’s Chophouse in Meadville

Liquor license to be sold in bankruptcy of closed Cannon’s Chophouse in Meadville

In its bankruptcy filings, Cannon’s Chophouse, the newly closed restaurant in downtown Meadville, lists its liquor license as its most valuable asset, worth an estimated $60,000.

The license’s value on the open market is likely to become more clear over the next several weeks.

Cannon’s is close to reaching a deal to sell the liquor license and other assets to raise funds to pay creditors whatever it can to close out its Chapter 11 case in U.S. Bankruptcy Court in Erie, the restaurant’s bankruptcy lawyer said.

Cannon’s is looking “to sell the assets in a way that is somewhat beneficial to the bankruptcy estate,” attorney Michael Kruszewski said at a court hearing on Tuesday.

He told U.S. Bankruptcy Judge Carlota Bohm that he has identified a prospective buyer and intends to file a sale motion within a week or two.

Liquor licenses usually change hands in private sales, a situation that keeps the sale prices confidential. The sale of the Cannon’s liquor license through a public court action could provide a look at the market value of a liquor license in northwestern Pennsylvania.

What happened to Cannon’s reorganization plan?

The imminent sale of the liquor license also signals that Cannon’s

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August 27, 2023 by ATTORNEY
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