Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Thursday, Dec. 7. In today's briefing, Air Methods, a helicopter ambulance business backed by a private-equity firm, received bankruptcy court approval for its restructuring plan to cut $1.7 billion of debt. Also, a bankruptcy judge denied $21 million in fees requested by six firms representing a group of personal injury firms who in turn represented 18,000 sex-abuse victims in the case of the Boy Scouts of America.

Air Methods, a helicopter ambulance business backed by a private-equity firm, received bankruptcy court approval for its restructuring plan to cut $1.7 billion of debt.

Under the plan approved by the U.S. Bankruptcy Court for the Southern District of Texas, Air Methods is expected to exit chapter 11 before the end of the year, according to a court filing Wednesday. 

The Greenwood Village, Colo.-based company sought protection from creditors in October with a proposed restructuring agreement that would cut its debt load to roughly $550 million from $2.24 billion.

Both secured lenders and unsecured bondholders will take a loss on their original investments. Creditors will also take some of the equity in the reorganized business.

The company was among a few healthcare providers that filed for bankruptcy this year, partly because of the fallout from the No Surprises Act that took effect last year to protect patients from surprise medical bills. Envision Healthcare and American Physician Partners were other companies that sought bankruptcy protection, citing the negative impact from the law.

• Earlier: Helicopter Ambulance Operator Air Methods Files Chapter 11
• Also: Surprise Medical Billing Law Heaps Pressure on Healthcare Providers

A bankruptcy judge denied $21 million in fees requested by six firms representing a group of personal injury firms who in turn represented 18,000 sex-abuse victims in the case of the Boy Scouts of America.

The group of personal injury firms that banded together to form the Coalition of Abused Scouts for Justice were often at odds with the official committee of abuse survivors, a separate group representing the interests of all 82,200 victims in the case.

At one point the coalition urged victims to vote in favor of a $1.9 billion settlement of abuse claims, while the official committee lobbied for a no vote. Ultimately, the Boy Scouts exited bankruptcy earlier this year after victims voted overwhelmingly in favor of a bigger settlement. 

Judge Laurie Selber Silverstein of U.S. Bankruptcy Court for the District of Delaware said she would not approve the request to pay the six firms out of the Boy Scouts estate because they failed to show that their work “transcended self-interest.”

These advisers served the interest of the personal injury firms they represented and should be paid by those firms, the judge said. Organizations in bankruptcy typically foot the bill for their advisers as well as those of the official creditors committee.

—Soma Biswas

Nogin has entered chapter 11 bankruptcy proceedings, part of a broader restructuring plan for the company.

The New York-based e-commerce technology company said B. Riley Financial was providing a stalking horse bid and debtor-in-possession financing. The company said B. Riley had exposure to Nogin through other investments.

Nogin said operations would continue as normal through the restructuring.

“Going forward, our financial structure will be aligned to properly support our growing business,” said Nogin Chief Executive Jonathan Huberman. “We want to reassure our clients and partners that there will be no disruption in our services.”

The company said the restructuring plan would reinforce Nogin’s financial stability and allow for future growth.

—Ben Glickman

It got a lot harder to make it to the top of McKinsey & Co.

The closely held firm named its new class of partners, and the group is roughly a third smaller than last year, according to people familiar with the matter, in the latest sign that economic conditions have dented demand for high-price consultants.

Around 250 people will become partners early next year, a far smaller class than previous years. McKinsey named about 380 people to partner in 2022. Making McKinsey partner, like similar promotions at Goldman Sachs or big law firms, comes with big pay bumps and can catapult a career.

The consulting industry boomed during the pandemic as companies sought advice about how to revamp their business, escalating a battle for talent among McKinsey, Bain & Co. and other top firms.

Bob Sternfels, the global managing partner, has worked to speed up decision-making in the firm and to move McKinsey past a string of reputational challenges in recent years. The firm in February 2021 said it had reached a $573 million settlement over its previous work advising OxyContin maker Purdue Pharma LP and other drug manufacturers to aggressively market opioid painkillers. McKinsey admitted no wrongdoing. The firm also came under scrutiny in recent years for its work with some foreign governments, including Saudi Arabia.

The administration announced its latest round of cancelations on Dec. 6, forgiving about $5 billion in loans for roughly 80,000 borrowers. Since taking office in 2021, the Biden administration has arranged to cancel loans equal to around 30% of the total projected cost of its blocked mass cancellation plan.

More than three million borrowers have had $132 billion of their federal student loans flagged for cancellation, despite a Supreme Court ruling in June that blocked relief for millions more student-loan holders.

The high court ruled that the Biden administration couldn’t cancel hundreds of billions of dollars for tens of millions of student-loan holders, reasoning that the authority for such a broad-based policy doesn’t exist under the law. While that closed one path,  Biden tapped a variety of different tools that no previous president had ever used to this extent.

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