FedSoc Forums Litigation Update: LTL Management’s Chapter 11 Bankruptcy
May 11, 2023
01:00:11
LTL Management LLC (LTL) is a subsidiary of Johnson & Johnson (J&J) that was established in 2021 to hold and manage claims related to a mass tort alleging that J&J’s talc-based baby powder caused many cases of ovarian cancer, mesothelioma, and other serious health issues. J&J claims that settling the mass tort in this manner is a reasonable and legitimate course of action. Some plaintiffs’ attorneys claim that J&J is using a bad faith strategy that serves no legitimate business purpose, and the tort litigation should be allowed to continue.
The case began in the United States Bankruptcy Court for the District of New Jersey. Chief Judge Michael Kaplan ruled in favor of LTL in February 2022 holding that LTL’s filing for Chapter 11 protection was “unquestionably a proper purpose under the Bankruptcy Code.” Upon an expedited appeal, a three-judge panel of the Third Circuit reversed and narrowly held in favor of claimants.
Hours later, LTL once again filed for Chapter 11 protection; the new filing includes an $8.9 billion settlement offer. Some – including the U.S. Department of Justice’s Trustee Program – continue to argue that J&J is misusing bankruptcy law through LTL, but others think the massive settlement is in the best interest of claimants. Both LTL and parent J&J reject that its bankruptcy filing is illegitimate, illegal, or in bad faith.
This webinar served as a second installment of the February 16, 2023 webinar titled Chapter 11 Bankruptcy & Mass Torts: A Review of the Third Circuit’s LTL Opinion with Professors Lindsey Simon and Tony Casey.
Featuring:
--Professor Tony Casey, Deputy Dean, Donald M. Ephraim Professor of Law and Economics & Faculty Director, The Center on Law and Finance, University of Chicago Law School
--Professor Lindsey Simon, Robert Cotten Alston Associate Chair in Corporate Law, University of Georgia School of Law
--Mikal C. Watts, Partner, Watts Guerra LLP
The case began in the United States Bankruptcy Court for the District of New Jersey. Chief Judge Michael Kaplan ruled in favor of LTL in February 2022 holding that LTL’s filing for Chapter 11 protection was “unquestionably a proper purpose under the Bankruptcy Code.” Upon an expedited appeal, a three-judge panel of the Third Circuit reversed and narrowly held in favor of claimants.
Hours later, LTL once again filed for Chapter 11 protection; the new filing includes an $8.9 billion settlement offer. Some – including the U.S. Department of Justice’s Trustee Program – continue to argue that J&J is misusing bankruptcy law through LTL, but others think the massive settlement is in the best interest of claimants. Both LTL and parent J&J reject that its bankruptcy filing is illegitimate, illegal, or in bad faith.
This webinar served as a second installment of the February 16, 2023 webinar titled Chapter 11 Bankruptcy & Mass Torts: A Review of the Third Circuit’s LTL Opinion with Professors Lindsey Simon and Tony Casey.
Featuring:
--Professor Tony Casey, Deputy Dean, Donald M. Ephraim Professor of Law and Economics & Faculty Director, The Center on Law and Finance, University of Chicago Law School
--Professor Lindsey Simon, Robert Cotten Alston Associate Chair in Corporate Law, University of Georgia School of Law
--Mikal C. Watts, Partner, Watts Guerra LLP