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Philly Hospital Owner Denied Loan Approval; Intelsat Directors on Trial
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Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Thursday, Dec. 2. Here's what you need to know: The investor who bought out Philadelphia's now-defunct hospital for the poor before its bankruptcy failed to win approval for a real-estate rescue loan. Satellite communications company Intelsat is gearing up for a trial on its bankruptcy plan and corporate governance.
And the judge overseeing appeals of Purdue Pharma LP's bankruptcy plan wants to hear more about whether the company's wealthy family owners abused the bankruptcy system.
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Hahnemann University Hospital, in Philadelphia, Pa., shown here in 2019, declared bankruptcy and closed its doors for good.
PHOTO: BASTIAAN SLABBERS/ZUMA PRESS
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Philadelphia hospital backer denied approval of rescue loan. The investor who bought Philadelphia’s Hahnemann University Hospital before its collapse failed to win a bankruptcy court’s approval to take out a $17.5 million loan on the defunct healthcare center’s underlying real estate.
The judge overseeing Hahnemann's liquidation declined to endorse Joel Freedman's authority to put up the former hospital’s property as collateral for a mortgage loan, which he needs to cover legal costs, pension obligations and ongoing maintenance stemming from the 2019 bankruptcy.
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Intelsat's corporate governance goes on trial. Satellite and broadcast giant Intelsat SA is gearing up for a trial over a $15 billion bankruptcy plan in which creditors are expected to allege that some corporate directors ignored conflicts of interest and prioritized legal releases for themselves.
A bankruptcy judge has set aside two weeks for the trial on Intelsat's chapter 11 plan, which is being opposed by junior creditors of the publicly-traded parent company including Cyrus Capital Partners LP, Anchorage Capital Group LLC and Goldman Sachs Group Inc. The bankruptcy plan would leave $39 million for those bondholders, less than 10 cents on the dollar of their claims,
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J&J talc claimants ask for dismissal of bankruptcy case. Cancer victims sought to dismiss the bankruptcy case that Johnson & Johnson filed to settle liabilities tied to its talc-based baby powder. A committee of injury claimants said Wednesday that J&J's decision to place talc-related liabilities into bankruptcy was meant only to shield assets and avoid jury trials, which isn't what chapter 11 is for.
J&J has said the bankruptcy by its LTL Management LLC subsidiary was designed to facilitate a fair settlement and avoid wasteful spending on nearly 40,000 talc-related injury lawsuits filed around the country. Talc claimants disagree, saying J&J is exploiting legal protections meant for "honest but unfortunate" businesses. The company hived off its talc-liabilities into LTL, which was then placed in chapter 11.
"The world is watching this case," the talc claimants said in Wednesday's filing in the U.S. Bankruptcy Court in Trenton, N.J. J&J maintains its talc products are safe and don't cause cancer. A hearing is set for mid-February on the claimants' request to toss out the bankruptcy. If granted, that would restart talc litigation that has cost J&J roughly $3.5 billion so far. — Andrew Scurria
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Judge seeks input on whether Purdue's Sacklers abused bankruptcy system. The federal judge weighing a $4.5 billion settlement between Purdue Pharma LP and the drugmaker's Sackler family owners wants to hear more about whether they abused the bankruptcy system.
Judge Colleen McMahon of the U.S. District Court in New York raised the question about the Sacklers at a hearing on Tuesday and now wants additional written briefs. She said her concerns relate to more than $10 billion that Purdue distributed to the Sacklers from 2008 to 2017. Purdue filed chapter 11 in 2019, facing thousands of lawsuits alleging it and its owners contributed to the opioid crisis.
Judge McMahon said she is "struggling" with whether she should consider those distributions while weighing whether to approve legal releases that would shield Sackler family members from civil litigation. In return, they agreed to a $4.5 billion settlement to fund opioid abatement. The judge asked lawyers involved in the appeal to file briefs by Monday. — Jonathan Randles
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Some federal and state authorities opposed the bankruptcy plan, arguing the Sackler settlement is unconstitutional.
PHOTO: TOBY TALBOT/ASSOCIATED PRESS
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"If you look at the amount of inflation that we have and its causes, that is at most a small contributor.”
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— Treasury Secretary Janet Yellen on the administration's spending plans
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Toys R Us to open new flagship at American Dream mall. The store is set to open in mid-December, at the tail end of this year's holiday shopping season, according to a press release from Toys R Us parent WHP Global. (Retail Dive)
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