Herrick Files Amicus Brief in Third Circuit Appeal Arising from Johnson & Johnson Spin-off Bankruptcy Case Supporting the Case’s Dismissal
Amici Law Professors Support the Direct Appeal from the Bankruptcy Court’s Denial of a Motion to Dismiss Debtor’s Chapter 11 Case
Herrick, Feinstein LLP authored and filed an amicus brief on behalf of a group of well-renowned bankruptcy law professors. The debtor, LTL Management LLC (“LTL”), which is the entity created by Johnson & Johnson (“J&J”) to hold its talc liabilities, filed for Chapter 11 protection in October 2021. The professors filed this brief in support of the Official Committee of Talc Claimants’ appeal from the Bankruptcy Court’s denial of its motion to dismiss LTL’s chapter 11 case, which the Third Circuit Court of Appeals agreed to hear on an expedited basis after the Bankruptcy Court agreed to certify the appeal to be heard directly by the Third Circuit. Herrick previously filed an amicus brief with the Bankruptcy Court, as discussed here. The Talc Claimants’ Committee represents the individuals who have sued J&J alleging that its talc products caused them to develop cancer.
The amicus brief argues that J&J’s creation of LTL using a divisive merger mechanism referred to as the “Texas Two-Step” to funnel all of its talc liabilities into a non-operating entity only for that entity to file for bankruptcy usurps the right of creditors and undermines the bankruptcy system.
The Herrick team included Sean O’Donnell, Stephen Selbst, Steven Smith and Silvia Stockman.
A copy of the brief is available here.
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