bankruptcy filing

Executive bonuses at opioid firm Endo were ‘excessive’ and ‘secret’ before bankruptcy, state AGs say

Seven state attorneys general and a court-appointed bankruptcy federal watchdog are opposing up to $94 million in pre-bankruptcy bonuses paid to top executives and other insiders at opioid drug firm Endo International in Chester County, court documents show.

The bonuses to the highest executives were doled out in “secret” and drain financial resources of the money-losing Endo available for victims of the Malvern company’s addictive pills, according to state attorneys general who filed their objections as a committee on Wednesday in New York.

Pennsylvania Attorney General Josh Shapiro is one of the seven whose court filing called the top executive pre-bankruptcy bonuses “excessive.”

Endo, facing mounds of litigation over its alleged role in the national opioid crisis, filed for bankruptcy protection on Aug. 16. The Inquirer first reported on the bonuses days later.

U.S. Trustee William Harrington, the watchdog, said in a separate court filing earlier this month that Endo paid $94 million in bonuses to top executives and other insiders in the months prior to the bankruptcy filing, while Endo’s restructuring plan leaves only $27.4 million initially for individual opioid victims who are not state entities.

Endo has “provided virtually no information, much less sufficient information” to evaluate the

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Limiting ‘preference’ liability exposure in bankruptcy

Joe Foster

As the saying goes, what goes up, must come down. After years of robust growth, the U.S. economy appears to be hitting a rough patch. In the coming months, it is likely that some businesses will not survive the challenges that lie ahead, and will be forced to file bankruptcy.

As bankruptcy attorneys, we find that one of the most difficult issues to explain to a client is receipt of a demand letter from a bankruptcy trustee seeking return of payments from a customer received months or years before. To add insult to injury, the customer, now a debtor in bankruptcy, often still owes the client. In addition, the letter typically includes a threat that if the payment is not returned, the trustee will file a lawsuit.

This claim by the trustee is referred to as a “preference” action. The intent of the law is to prohibit insolvent companies from playing favorites or preferring a particular vendor over another. Preference claims force the so-called “preferred” vendor to return the payment so that all general creditors can enjoy equality of treatment.

A preference claim is, unfortunately, very simple to bring and very easy to prove. To successfully assert the

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Alex Jones company files for bankruptcy; Sandy Hook defamation trial expected to continue

AUSTIN, Texas – Free Speech Systems, the main company owned by Austin-based conspiracy theorist Alex Jones, has filed for bankruptcy – but a Jones lawyer said the action is not expected to affect a trial underway in Austin in a lawsuit by the parents of a child killed in the 2012 attack on Sandy Hook Elementary School.

Free Speech Systems, which operates Jones’ InfoWars media system, listed $14.3 million in assets, including almost $1.16 million in cash and almost $1.6 million in property and equipment, as of May 31.

But the Austin corporation’s bankruptcy filing also listed $79 million in liabilities, including a $54 million debt owed to PQPR Holdings.

Video: Sandy Hook conspiracist Alex Jones could owe $150 million in defamation case 

A separate lawsuit filed by two Sandy Hook families earlier this year in state court accused Jones of systematically hiding millions of dollars in assets and called the $54 million debt dubious, saying PQPR is a Nevada-registered company that is owned “directly or indirectly by Jones, his parents and his children through an alphabet soup of shell entities.” That lawsuit is still in the early stages.

Alex Jones walks into the courtroom in front of Scarlett

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Alex Jones’ company ‘fabricated’ debt, Sandy Hook families say

Sandy Hook families suing Alex Jones for damages after the Infowars host was held liable for defamation have accused him of playing a complex financial shell game in an attempt to avoid paying, according to a new objection they filed in federal bankruptcy court.

The families objected to Jones’ company’s request for the court to authorize the use of cash collateral to “pay reasonable and necessary operating expenses.”

The objection alleges that the debt is based on a “fabricated, allegedly secured loan from an affiliated, insider entity of the debtor, PQPR,” attorneys wrote in their objection filed Tuesday in U.S. Bankruptcy Court Southern District of Texas on behalf of the Sandy Hook families involved in the three defamation cases against Jones in Connecticut and Texas, as well as a Norwalk man he defamed over the Parkland, Fla. shooting.Last week, Jones sued his own company, Free Speech Systems, to be held harmless in any award, meaning that the company and not Jones would be liable for any damages.

An initial response filed by attorneys for the families, called the attempt a “fiction” in which “found facts and sworn testimony mean nothing at all.”

One day later, Free Speech Systems filed

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Bankruptcy filing threatens to delay IMG Center sale effort

A bankruptcy filing threatens to delay a sale of the IMG Center, a 15-story downtown Cleveland office building that has been tied up in court for three years.

James Breen Real Estate LLC, a small company owned by longtime IMG Center steward Jim Breen, filed a Chapter 7 bankruptcy petition on July 20. The move hit the pause button on foreclosure litigation over the IMG Center as a monthslong sales push seemed to be nearing its crescendo.

It’s unclear how long the timeout will last. In Chapter 7 cases, an automatic stay — which stalls lawsuits, foreclosures, repossessions and collection actions against a debtor — typically runs for 90 days or so. But creditors can seek relief from those restrictions.

James Breen Real Estate is not actually a defendant in the foreclosure case, raising the question of whether the stay will have sticking power. At very least, though, the bankruptcy filing complicates an already messy legal fight and adds to the uncertainty around the future of a high-profile property.

Paul Downey, the court-appointed receiver who has been overseeing the IMG Center since October 2019, said he’s unsure about the implications for the sale effort, which he’s conducting with help from

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