What We’re Reading This Week [October 14, 2022]
On October 12th, Bloomberg reported that Alex Jones will join his bankrupt media production company, Free Speech Systems, in a court-supervised settlement with the families of the Sandy Hook school shooting victims. Specifically, Jones’ media company had filed a chapter 11 petition for bankruptcy in July of this year, in the Southern District of Texas. Such filing had been precipitated due to a plethora of court settlements in which Jones was found to have made inflammatory comments that the Sandy Hook Elementary School shooting was a hoax and a conspiracy by the Democratic party and, to have used these comments to build an audience and make profit. Last month, the bankruptcy court had already expanded the powers of the trustee overseeing the case and ordered an investigation of the company. The mediation will therefore proceed while the trustee continues to investigate the company’s finances. [Bloomberg; Oct. 12, 2022]
On October 12th, Yahoo! News reported that the Archdiocese of Santa Fe filed its long awaited Plan of Reorganization, nearly four years after the filing of its initial petition. The Archdiocese had filed its chapter 11 petition in the District of New Mexico in an attempt to resolve mounting abuse claims and stem financial losses that resulted from the corresponding suits. As part of the Plan, the clergy abuse survivors will receive a $121 million settlement and six insurers will pay $46.5 million, with the remaining $75 million being contributed by the archdiocese, which has already put more than $69 million into an escrow account, with a $5.4 million promissory note, to be paid in full by March 31. Such contribution is considered to be among the largest settlements paid by an archdiocese in the country. The hearing on the Plan will take place on October 19th, in front of Judge David Thuma. [Yahoo; Oct. 12, 2022]
On October 11th, the New York Times reported that U.S. Department of Treasury fined cryptocurrency exchange, Bittrex, $24 million for breaking U.S. sanctions, which is the largest penalty the government has imposed on a crypto business for violating sanctions. According to the Treasury, Bittrex allowed customers in Cuba, Iran, Sudan, Syria and Crimea region of Ukraine to make virtual currency transactions worth more than $263 million and committed over 116,421 sanctions violations. The $24 million penalty is part of an expanding effort by the Treasury Department to crack down on crypto crimes and money laundering. [NYT; Oct. 11, 2022]
On October 11th, Reuters reported that the U.S. Supreme Court declined to hear McKinsey & Co.’s bid to escape a lawsuit in which it is accused of concealing potential conflicts when seeking permission from bankruptcy courts to perform lucrative work on corporate restructurings. Turnaround specialist Jay Alix, filed a suit accusing the firm of running “ a criminal enterprise” by hiding its ties to lenders and clients’ competitors. Alix further accused McKinsey of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act, which targets organized crime. Originally Judge Furman in the Southern District of New York dismissed the lawsuit but that was overturned by the Second Circuit. McKinsey then filed a petition to the Supreme Court, but that was ultimately denied. Accordingly, the case will proceed in New York. [Reuters; Oct. 11, 2022]
