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J&J ended up paying $9 billion but they still ended up being allowed to spin a subsidiary to hold that money and essentially take on the liability of future law
by delfinom 3y ago
J&J ended up paying $9 billion but they still ended up being allowed to spin a subsidiary to hold that money and essentially take on the liability of future lawsuits or what happens when the money runs out and there are more claims.
- hackernewds 3y agoWhat if this subsidiary has $1B in assets? Do they go bankrupt and not have to pay the rest of the $8B?
- arpora 3y agoWould recommend the Matt Levine write-up: https://archive.is/44wfu https://archive.is/44wfu In the J&J case, the subsidiary had the right to draw at least ~$60B in order to pay off future lawsuits if the initial subsidiary's assets ran out, so there was never any real risk that it would leave suitholders unpaid. The switch into bankruptcy court is a way to arbitrate and organize the lawsuits, which was overturned because given the right to draw money from the J&J parent co the subsidiary wasn't actually at risk of bankruptcy.