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PG&E Fire Victims, Creditors Join Forces with Rival Reorg Plan

PG&E Corp. bondholders battling with shareholders for control of the bankrupt California utility giant have teamed up with wildfire victims to present a new reorganization plan, Bloomberg News reported. The creditors and the official committee representing fire victims said their new proposal includes a $24 billion settlement to pay all claims from fires blamed on PG&E’s equipment. That’s billions of dollars more than PG&E has offered to those who lost loved ones and homes in some of the most destructive fires in California history. The coalition threatens to derail PG&E’s own reorganization plans and adds a new wrinkle to an already complex case involving the biggest utility bankruptcy in U.S. history. The creditors and wildfire victims are seeking to end the San Francisco-based company’s exclusive right to come up with a proposal so they can put forth theirs. Their joint one would virtually wipe out current shareholders while PG&E’s plan would allow them to keep stock and pay wildfire victims less than they’re demanding. The case is PG&E Corp., 19-bk-30088, U.S. Bankruptcy Court Northern District of California (San Francisco).

Commentary: The UAW Didn’t Learn from General Motors’ Bankruptcy

A decade ago, the United Auto Workers were forced to negotiate a new labor contract that more or less accomplished what Sen. Bob Corker (R-Tenn.) demanded as a concession for his support of a government bailout, according to commentary published by Forbes. Without reversing the practices forced upon automakers in contract negotiations since the 1980s, Corker understood that a bailout would be meaningless, leaving the Detroit 3 vulnerable to the next recession or economic crisis. The UAW fared better under the 363 bankruptcy than it would in chapter 7 or 11, but it had to acquiesce to demands that restored labor to a variable cost and removed the gold-plated health care obligations that retirees enjoyed off the balance sheet. Work rules and job classifications were streamlined at the factory level, and the onerous and ridiculous Jobs Bank paid laid-off workers more than 90 percent of their normal wages while doing nothing. I have always held these company’s managements’ responsible for putting short-term objectives ahead of facing down the Union and its ever-greater demands that brought the domestic automakers to this crisis. The tool the Union used is the same as we see today… select a target and threaten to strike while allowing domestic rivals to capture market share during the shut-down period. Detroit’s myopia was so ingrained that it failed to understand the financial consequences of what the target company agreed to. The target auto company executives often misguidedly saw it as an opportunity to negotiate favorable terms for itself  while punishing domestic rivals. That shortsighted behavior usually included the assumption that in due course the transplant factories in the south would be unionized, which, of course, has not happened, nor will it. Today’s strike only reinforces to the transplant workers that they are protected by working for financially strong companies and not by a contract.

How U.S. Senators Invest in Firms They Are Supposed to Regulate

As they set national policy on issues such as climate change, tech monopolies, medical debt and income inequality, U.S. senators have glaring conflicts of interest, according to an article from Sludge and The Guardian. An analysis of personal financial disclosure data as of Aug. 16 has found that 51 senators and their spouses have as much as $96 million personally invested in corporate stocks in five key sectors: communications/electronics; defense; energy and natural resources; finance, insurance and real estate; and health. The majority of these stocks come from public companies, and some are private. Overall, the senators are invested in 338 companies. Congressional financial disclosures present investments in dollar ranges, not exact amounts, so all data in the report comes in ranges, some very wide. The median stock investment range is between $100,000 and $365,000, while the average range of the investments is between $551,000 and nearly $1,874,000. Not only are the senators far wealthier than most of their constituents, but they’re in prime position to increase their wealth via policymaking. It’s not illegal for members of Congress to have personal financial stakes in the industries on which they legislate, but such investments raise questions about lawmakers’ motivations. If a representative on the House Financial Services Committee owns hundreds of thousands of dollars worth of stock in Bank of America, how might this investment affect their questioning of Bank of America’s CEO in a hearing? Could it influence how they legislate and vote on banking issues?

Trump Sues Manhattan DA Cyrus Vance Over Subpoena for His Tax Returns

President Donald Trump filed a lawsuit Thursday against Manhattan District Attorney Cyrus Vance, who subpoenaed Trump's accounting firm for eight years of Trump's personal and corporate tax returns earlier this month, NBC News reported. The subpoena stems from Vance's criminal investigation into the Trump Organization about hush money payments made to two women who have alleged affairs with the president. Trump has strongly denied the affairs. The lawsuit, filed in the U.S. District Court for the Southern District of New York, names Vance and the president's tax preparer, Mazars USA, as defendants. It argues that the Manhattan district attorney should not receive Trump's tax returns because "'[v]irtually all legal commenters agree' that a sitting President of the United States is not 'subject to the criminal process' while he is in office.” Jay Sekulow, the president's lawyer, commented on the constitutionality of Vance's probe, saying, “In response to the subpoenas issued by the New York County District Attorney, we have filed a lawsuit this morning in Federal Court on behalf of the President in order to address the significant constitutional issues at stake in this case." Vance's office is probing hush money payments made during the 2016 election to adult film star Stormy Daniels and ex-Playboy model Karen McDougal, both of whom have alleged affairs with Trump, which he has denied.

Purdue Pharma Wants to Pay ‘Certain Employees’ $34 Million in Bonuses

Officials at troubled drugmaker Purdue Pharma say “certain employees” should be paid more than $34 million in bonuses for meeting and exceeding goals over the last three years, even though the company is facing thousands of lawsuits over its role in the nation’s opioid crisis and earlier this week filed for bankruptcy, the Washington Post reported. In a legal filing, attorneys for Purdue Pharma asked a judge to authorize millions in payments to employees who have met “target performance goals.” It is not clear from the company filings why employees would be eligible for bonuses, because, while the bonuses are supposed to be partly contingent on the company’s financial performance, the company has filed for bankruptcy. At a bankruptcy court hearing in White Plains, N.Y., on Tuesday, Paul K. Schwartzberg, an attorney for the U.S. Trustee, raised objections to some of the bonuses, stating that the bonuses go “way beyond” what is typical. “That $34 million is owed to the victims of the opioid epidemic, and every last cent should be spent on addiction science, treatment and recovery,” Connecticut Attorney General William Tong said in a statement to the Washington Post. “Purdue and the Sacklers still don’t seem to comprehend the pain and suffering they have caused. While I am sympathetic to the workers at Purdue, many of whom live in my hometown and state and had nothing to do with the egregious actions of their employer, this is not business as usual.” (Subscription required.)

Fentanyl Drug Finds New Home in First Opioid Crisis Bankruptcy Deal

Insys Therapeutics Inc. won bankruptcy-court approval Thursday to sell Subsys, the opioid that spawned criminal racketeering charges against its top executives and set off investigations and lawsuits that plunged the company into bankruptcy, WSJ Pro reported. It is believed to be the first bankruptcy sale of a pharmaceutical drug that played a role in fueling the nationwide opioid epidemic, said Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del. At a court hearing, he said he would sign off on a sales agreement that includes safeguards to ward off future misuse of Subsys. The deal terms will keep Subsys on the market, but how it is prescribed and to whom will be closely watched, the judge said. Insys is a relatively small player in the universe of companies accused of profiting from the opioid crisis, and Subsys is a niche drug, or it was supposed to be, said Brian Edmunds, a lawyer for Maryland and other states that raised concerns about the sale and asked for restrictions to be built in. Lawyers for states have been active in Insys’s bankruptcy, intent on ensuring it sets high standards for other opioid bankruptcies, such as that of OxyContin maker Purdue Pharma LP. The states dropped their objections to the Subsys sale at Thursday’s hearing after agreements were reached with the buyer, BTcP Pharma LLC.
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