United States: What we read this week [January 24, 2022]
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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.
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]
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