Comment by reenorap
10 hours ago
No.
My OP said that Texas Two step was used all the time. I said J&J tried to use Texas Two Step and it ultimately failed. And yes it did fail mostly because it was not being used in good faith.
10 hours ago
No.
My OP said that Texas Two step was used all the time. I said J&J tried to use Texas Two Step and it ultimately failed. And yes it did fail mostly because it was not being used in good faith.
> And yes it did fail mostly because it was not being used in good faith
As of today, judgments against J&J total to less than $10b. J&J committed up to $61.5b to LTL, the company it spun off. Simple arithmetic shows us all current judgments will be satisfied. https://news.ycombinator.com/item?id=47222778
The judge used this $61.5b commitment - which J&J made to ensure LTL would pay for all the lawsuits J&J lost - as proof that LTL wasn't actually bankrupt. Which is weird but also correct.
Where is the bad faith today? I mean it's possible J&J has done some internal analysis and expects to be on the hook for more than that in the future. Or there's some other arcane legal issue I don't understand. And in that sense committing the $61.5b is a smart way of capping their losses while still looking like good guys today. There's no evidence of that right now though.
To re-iterate, the bankruptcy was rejected because of how it was structured. Not because there was an attempt to dodge liability. To me that's a more damning indictment of the legal system because it implies liability dodging might have worked if it were structured right.