DOJ Says J&J Talc Bankruptcy Violates Congressional Mass Tort Rules
July 01 2022 - 1:37PM
Dow Jones News
By Jonathan Randles
The U.S. Justice Department told a federal appeals court that
Johnson & Johnson's strategy for moving talc injury litigation
to chapter 11 violates the regime Congress has authorized for
litigating mass torts.
The U.S. Trustee Program, a Justice Department unit monitoring
bankruptcy courts, said in a Thursday filing with the Third U.S.
Circuit Court of Appeals that Johnson & Johnson's decision to
put a newly formed subsidiary into chapter 11 to drive settlements
of talc litigation circumvented federal multidistrict litigation
procedures which have been prescribed by Congress as the way to
deal with mass torts. Johnson & Johnson used an emerging
restructuring transaction called a Texas divisive merger to send
the talc liability to the subsidiary before it filed bankruptcy, a
strategy that will be scrutinized by the appeals court.
The U.S. Trustee and talc injury claimants want the Third
Circuit to reverse a bankruptcy judge who authorized the Johnson
& Johnson talc subsidiary to stay in chapter 11.
Write to Jonathan Randles at jonathan.randles@wsj.com
(END) Dow Jones Newswires
July 01, 2022 13:22 ET (17:22 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From Aug 2024 to Sep 2024
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From Sep 2023 to Sep 2024