This is the 3rd circuit, which covers Delaware and all of its corporations. This is a really big deal, until and if the Supreme Court is willing to take it up

This is the 3rd circuit, which covers Delaware and all of its corporations. This is a really big deal, until and if the Supreme Court is willing to take it up and reverse (but remember J&J went down this path because the Supreme Court refused to hear an appeal of a talc verdict against them). > ... J&J’s stated goal was to isolate the talc liabilities in a new subsidiary so that entity could file for Chapter 11 without subjecting Old Consumer’s entire operating enterprise to bankruptcy proceedings. > Two days later, LTL filed a petition for Chapter 11 relief ... > Talc claimants there moved to dismiss LTL’s bankruptcy case as not filed in good faith ... > We start, and stay, with good faith. Good intentions — such as to protect the J&J brand or comprehensively resolve litigation—do not suffice alone. What counts to access the Bankruptcy Code’s safe harbor is to meet its intended purposes. Only a putative debtor in financial distress can do so. LTL was not. Thus we dismiss its petition. Page 49: > Finally, we cannot help noting that the casualness of the calculations supporting the [Bankruptcy] Court’s projections engenders doubt as to whether they were factual findings at all, but instead back-of-the-envelope forecasts of hypothetical worst-case scenarios. BURN! https://www2.ca3.uscourts.gov/opinarch/222003p.pdf https://www2.ca3.uscourts.gov/opinarch/222003p.pdf