Pro Bankruptcy Briefing: J&J Unit Files Bankruptcy Over Talc Claims; Purdue Appeals to Be Heard
October 15 2021 - 9:09AM
Dow Jones News
Good day. Companies are using bankruptcy as a tool to resolve
lawsuits over an ever-broader range of alleged misconduct, from
opioid addiction to sexual abuse and wildfire damage. J&J is
now joining in, turning to chapter 11 to try to settle its
liabilities for tens of thousands of personal-injury claims linked
to talc-based baby powder.
Meanwhile, opponents of Purdue Pharma's bankruptcy plan got a
guarantee that their arguments on appeal will be heard.
Top News
J&J places talc liabilities in chapter 11. Johnson &
Johnson is testing the limits of bankruptcy law to address mass
torts, placing its liabilities for allegedly dangerous talc
products in chapter 11. The move is sure to touch off a
confrontation with plaintiffs' lawyers, who say that bankruptcy
wasn't meant to help solvent companies avoid accountability. At
stake are tens of thousands of injury claims linking J&J's baby
powder to ovarian cancer, mesothelioma and other ailments.
Judge eases officials' concerns on Purdue Pharma appeals. A
federal judge said that Purdue Pharma LP's preparations to leave
bankruptcy won't thwart government authorities' appeals seeking to
overturn a $4.5 billion settlement with members of the Sackler
family who own the company.
Bankruptcy
Drugmaker Teligent files bankruptcy after failed inspection.
Generic drugmaker Teligent Inc. filed for bankruptcy protection
after the Food and Drug Administration flagged problems at the
company's manufacturing plant in Buena, N.J., that led to a recall
and production halt.
Gulf Coast Health Care files for chapter 11. Gulf Coast Health
Care Inc., which operates skilled-nursing facilities in Florida,
Georgia and Mississippi, has filed for bankruptcy, with debts that
include $49 million in rent owed to Omega Healthcare Investors
Inc.
Consumers
Close to 40% of U.S. households say they face financial
difficulties. U.S. households are struggling in many ways over a
year into the coronavirus pandemic, according to new polling. The
results show how the pandemic deepened an already divided economy,
with well-off people and businesses coming out the same or stronger
while many lower-wage workers were thrust into financial
crisis.
"Short-term help is not enough to solve deeply entrenched
inequities."
-- Richard Besser, president and CEO of the Robert Wood Johnson
Foundation
Distress
Banks reap profits from loan-loss reserves. Banks last year set
aside billions of dollars to prepare for a wave of pandemic loan
defaults. Now they are releasing those funds, which flow straight
to the bottom line. Wells Fargo and Bank of America posted banner
third-quarter results, each company boosted by the release of
loan-loss reserves.
In Other News
The Justice Department's bankruptcy watchdog is opposing
drugmaker Mallinckrodt Plc's reorganization plan to settle
thousands of lawsuits over its opioid painkillers, arguing that it
would improperly waive potential legal claims against affiliated
third parties. (Bloomberg)
The Chapter 7 trustee overseeing the dissolution of Kossoff PLLC
is stepping up his fight to gain access to records of the defunct
New York real estate law firm, seeking sanctions against an
insurance company and pressing one of the largest banks in the
world to cooperate. (Reuters)
(END) Dow Jones Newswires
October 15, 2021 08:54 ET (12:54 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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