September 2023

Bankruptcy Attorneys Question News-Press Owner Wendy McCaw About Assets, Property Transfers | Local News

Attorneys questioned Santa Barbara News-Press owner Wendy McCaw for two hours at a Thursday bankruptcy hearing, and dug into the business’ operations and the assets claimed in court documents.

McCaw’s Ampersand Publishing, parent company of the News-Press, declared bankruptcy on July 21, the same day the newspaper stopped publishing to its website and told all employes their jobs were eliminated.

The bankruptcy documents list few assets and more than $5 million owed to creditors such as former employees, vendors, utility companies, local businesses, and subscribers.

The assets conspicuously exclude real estate because McCaw transferred the business’ properties in 2014 to separate limited liability companies she controls, and apparently paid nothing to do so.

Those properties include the downtown Santa Barbara News-Press building at 715 Anacapa St., a parking lot across the street, and the newspaper’s Goleta printing press property at 725 S. Kellogg Ave.

McCaw said Thursday that the News-Press had no lease agreements and paid no rent to occupy the buildings, even after Ampersand Publishing no longer owned the properties.

The section of bankruptcy documents where leases would be is blank.

“With nothing listed there, I have questions,” said attorney Michael D’Alba of Danning Gill.

Bankruptcy trustee Jerry Namba,

Read the rest

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

Read the rest

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

Read the rest