Hours after its first bankruptcy case was dismissed for bad faith this afternoon, Johnson & Johnson’s talc business filed a new petition for relief under chapter 11 of the Bankruptcy Code. Check out the podcast, and view the transcript, below.
Hi, Reno Fernandez here. This just in: On Tuesday, April 4, 2023, Johnson & Johnson’s talc business, namely LTL Management LLC, filed a second chapter 11 bankruptcy petition just hours after a New Jersey bankruptcy judge dismissed its first case. The new case number is 23-12825, and it is before the same bankruptcy judge, namely Judge Michael B. Kaplan.
The judge dismissed LTL Management’s first case under the mandate of the Third Circuit, which ordered the case to be dismissed for bad faith because the business was not in financial distress.
Johnson & Johnson’s strategy depends on the trending “Texas Two-Step” maneuver, in which a problematic business unit is spun off and put into bankruptcy. The bad optics of this maneuver almost certainly played a role in the Third Circuit’s decision.
Now, LTL Management comes back with an $8.9 million settlement with personal injury claimants. We will see whether the result is different this time.
Once again, I am Reno Fernandez. I handle bankruptcy appeals throughout the country, at all levels, including the Supreme Court. I also consult at the trial level on anticipated appellate issues. If you have questions, or you would just like to chat, please feel free to reach out. Thank you.