Bankruptcy

Supreme Court Halts Purdue Pharma’s Bankruptcy Plan Amid Rising Multidistrict Litigations: Insights from Law.com’s Aleeza Furman

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Washington, D.C. – In a significant legal development, the Supreme Court has intervened to halt Purdue Pharma’s bankruptcy plan, a decision that underscores ongoing debates around accountability in the opioid crisis. This move casts uncertainty on the future of the company and its proposed settlements with thousands of plaintiffs. Purdue Pharma, recognized globally for its production of OxyContin, had previously reached a settlement agreement that was integral to its restructuring during bankruptcy proceedings. The deal was meant to temporarily resolve numerous lawsuits tied to the opioid epidemic, offering billions in compensation. However, with the Supreme … Read more

Court Rejects Johnson & Johnson’s Controversial Bankruptcy Strategy in Texas Again

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New York — In a substantial blow to Johnson & Johnson’s strategic legal defenses, an appeals court has once more turned down the healthcare giant’s controversial ‘Texas two-step’ bankruptcy ploy. This financial maneuver, which has sparked public and legal controversy, was designed to compartmentalize potentially billions of dollars in liabilities linked to claims that its talcum powder products caused cancer. The U.S. Third Circuit Court of Appeals ruled that the subsidiary created for the sole purpose of filing for bankruptcy did not demonstrate the appropriate financial distress required to qualify for such protection. This decision … Read more

Court Again Halts J&J’s Controversial Bankruptcy Strategy in Texas

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Philadelphia, PA — In a significant legal ruling, a federal appeals court has again halted Johnson & Johnson’s controversial attempt to manage thousands of lawsuits alleging harm from its talcum-based products through a subsidiary’s bankruptcy. This decision underscores the complexity and contentious nature of corporate bankruptcy strategies involving public health claims. Johnson & Johnson, a household name in healthcare products, utilized a subsidiary, LTL Management, to file for bankruptcy in October 2021. This move was seen as an effort to consolidate and potentially cap liabilities linked to thousands of claims suggesting that its baby powder … Read more

U.S. Lawmakers Introduce Bipartisan Bill to Curb Corporate Bankruptcy Loopholes Amid Johnson & Johnson Controversy

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Washington, D.C. — A new bipartisan bill is gaining traction in Congress, aimed at addressing a controversial bankruptcy strategy that has been employed by major corporations like Johnson & Johnson. This legal maneuver, known as the “Texas Two-Step,” allows companies to create separate entities to absorb liabilities, particularly those stemming from mass tort litigation, essentially shielding the main corporation from significant financial consequences. The legislative push seeks to overhaul aspects of the U.S. bankruptcy code that currently permit such divisions, a tactic that critics argue undermines the rights of litigants by limiting their ability to … Read more