What we read this week [January 24, 2022] – Insolvency/Bankruptcy/Restructuring

Reuters reports that a district court judge deferred to the bankruptcy court to find out whether Johnson & Johnson is entitled to the continued protection of the Bankruptcy Code’s automatic stay from mass tort suits it would otherwise be faced with its talc-based products while its subsidiary, LTL Management, files for bankruptcy. A committee of talc plaintiffs named in the LTL Management case had decided to “withdraw the remand” of that decision to the bankruptcy court, arguing that the case would be more appropriate to be decided in the district court. The district court disagreed, holding that the scope of the automatic stay was within the primary jurisdiction of a bankruptcy court.
[Reuters; Jan. 12, 2022].

The Financial Times reports that the Houston division of the Southern District of Texas has become a magnet for mega Chapter 11 bankruptcies, challenging more traditional jurisdictions like Delaware and the Southern District of New York. In 2021, one-third of all U.S. bankruptcy filings where debtor liabilities exceeded $500 million were filed in Houston. Major cases filed in Houston include JC Penney, Neiman Marcus and Chesapeake Energy. [Financial Times ; Jan.
11, 2022]

Reports The Wall Street Journal says the Federal Reserve is worried about rising inflation in U.S. Federal Reserve Chairman Jerome Powell called high inflation a “serious threat” to a full economic recovery and said that the central bank planned to raise interest rates because the economy no longer needs emergency assistance. However, Powell also said he was optimistic that supply chain bottlenecks would be reduced, helping to reduce inflation. [WSJ; Jan. 11, 2022]

Visit us at mayerbrown.com

Mayer Brown is a global provider of legal services comprised of law firms that are separate entities (the “Mayer Brown Firms”). The Mayer Brown firms are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, two limited liability companies established in Illinois in the United States; Mayer Brown International LLP, a limited company incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales under number OC 303359); Mayer Brown, a SELAS based in France; Mayer Brown JSM, a partnership of Hong Kong and its associated entities in Asia; and Tauil & Checker Advogados, a Brazilian legal partnership with which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are registered trademarks of Mayer Brown law firms in their respective jurisdictions.

© Copyright 2020. Mayer Brown Practices. All rights reserved.

This article by Mayer Brown provides information and commentary on interesting legal issues and developments. The foregoing is not a complete treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action regarding the matters discussed here.