Johnson & Johnson’s bid to file for chapter 11 foiled once again

Johnson & Johnson’s bid to file for chapter 11 foiled once again

THE WHAT? A New Jersey court has foiled Johnson & Johnson’s second attempt to channel its talc liabilities via the chapter 11 bankruptcy process.    

THE DETAILS Judge Michael Kaplan ruled that the company created by Johnson & Johnson in order to carry out the move known as the Texas two-step, LTL Management was not in sufficient financial distress. LTL Management did not, therefore, qualify for the legal protections of chapter 11.

THE WHY? Johnson & Johnson was hoping to use this legal vehicle to drive a mass settlement of the litigation it is facing over its talc-based baby powder. The manufacturer of Aveeno has vowed to appeal and continues to defend the safety of its products past and present.

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