After Hours

The Sunny Side of Bankruptcy

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May 31, 2023
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ANECDOTE

J&J and Talc

  • Johnson & Johnson created a subsidiary for talcum powder lawsuits, filing it for bankruptcy.
  • This subsidiary holds the claims and a proposed $9 billion settlement.
INSIGHT

Bankruptcy for Lawsuits

  • Companies use bankruptcy to handle lawsuits over harmful products.
  • This shields the broader company while addressing claims.
INSIGHT

Fairness vs. Justice

  • Bankruptcy offers fairer compensation than mass torts, where outcomes vary widely.
  • It streamlines claims, preventing gaming of the system, but bypasses jury trials.
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