Chapter 11 Bankruptcy & Mass Torts: A Review of the Third Circuit’s LTL Opinion

In 2021, LTL Management LLC (LTL), a newly created and separate subsidiary of Johnson & Johnson that was established to hold and manage claims in the cosmetic talc litigation, filed for voluntary Chapter 11 bankruptcy protection. The goal was to resolve all current and future claims fairly and efficiently. Opposition filed a motion to dismiss the case arguing it does not serve a valid restructuring purpose and suggesting J&J filed it in bad faith.

In February 2022, Chief Judge of the United States Bankruptcy Court for the District of New Jersey Michael Kaplan ruled in favor of LTL, 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 Chief Judge Kaplan and narrowly held in favor of claimants. The case is now under appeal for en banc review by the Third Circuit. Given the enormous national significance of the issue for corporate liability and civil justice, this case may advance to the Supreme Court for further adjudication.

In this recorded webinar a panel of bankruptcy law experts discuss the Third Circuit ruling, its impact, significance, and the path forward, including how to assess both the split between Chief Judge Kaplan and the Third Circuit. The panel discusses the purpose of Chapter 11 in preserving economic and social value and discuss the Third Circuit’s ruling in light of other Circuits that are reviewing similar legal questions. The panel will review core questions that the Third Circuit left unanswered and share their expert perspectives on the ruling’s precedent and what it may mean for mass tort litigation going forward.

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