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They weren't capping the total payouts in damages. The bankruptcy filing itself said that parent company would cover the cost to ensure everyone gets the money.

They weren't capping the total payouts in damages. The bankruptcy filing itself said that parent company would cover the cost to ensure everyone gets the money. Bankruptcy was a process to ensure every victim gets equal amount. The term for this process is misleading, and the mental image is very much of a company which is getting out of paying their victims. In this case, filing for bankruptcy created fairness among victims, they did not have to be first or fifth to get the right damages, every victim was treated equal. > That is, LTL — the box where J&J put its talc claims — could draw at least $61.5 billion from J&J to pay off those claims. The point here, the bankruptcy court concluded, was not to keep J&J from having to pay talc claims; the entire value of J&J’s consumer business was still on the line for those claims. The point, rather, was to deal with those claims in an organized and efficient way, to treat all the claimants fairly. The only reason the court quashed it was because it wanted J&J to fight the individual or class action lawsuits, and it was too early for bankruptcy.

onlypositive 3y ago
I'd rather see J&J go out of business entirely.
- ankit219 3y ago
  Okay. I think I don't care about J&J as long as victims are fairly compensated. For this one, and for any future victims that are affected by this product or any other product created by J&J.
  - onlypositive 3y ago
    I'd rather there were no future victims.
- dev_tty01 3y ago
  I get the sentiment, but if I stop and think about it, I don't understand the math. I'm not intending to criticize since I struggle with this myself. Try on this hypothetical. Imagine that ten people in a giant company called ACME made some decisions that led to 50,000 people getting hurt. ACME also employs 100,000 hard working people, representing perhaps 0.3-0.4 million family members dependent upon that income. Imagine further that ACME's other products have dramatically improved the lives of hundreds of millions of other people. Given that scenario, does the ethical math really work for ACME to be completely destroyed? It is easy to see how the 10 decision makers should be punished. It is also easy to see how the people who were hurt should be compensated in some way. Destroying ACME entirely will harm lots of other people so it is not clear how to justify that. It is a very frustrating domain because we think of these companies as monoliths, but they are really just a large collection of mostly very decent people.
  - tempest_ 3y ago
    Reads like a "too big to fail" argument. It works for the banking industry I guess so why not here too.
    - haswell 3y ago
      It’s unrelated in structured and substance to “too big to fail”. Too big to fail implies catastrophic harm worse than the (unpalatable) steps necessary to prop something up. This argument is really exploring the line between “company did something harmful” and “company did something so harmful they should no longer exist”. I’m not arguing for either, but TBTF is unrelated.
      - kevinventullo 3y ago
        I’m not sure I agree that the current argument is about whether the company did something so harmful they should no longer exist, but I agree that whatever it is, it is not the same as TBTF.
        haswell 3y ago
        This was in response to a comment up the chain exploring the premise: > Given that scenario, does the ethical math really work for ACME to be completely destroyed? I agree that the broader conversation is not just about ceasing to exist, but this was the context of my comment.
  - deleted 3y ago
    [deleted]
  - ToValueFunfetti 3y ago
    >Imagine further that ACME's other products have dramatically improved the lives of hundreds of millions of other people. ACME has already been compensated financially for their products, so I don't think we should count them again in the ethical calculus.
  - pessimizer 3y ago
shkkmo 3y ago
>In this case, filing for bankruptcy created fairness among victims, they did not have to be first or fifth to get the right damages, every victim was treated equal. It creates fairness among victims by removing their rights to seek higher damages via their own court cases. This "fairness" is only needed if the total amount of judgements exceeds what J&J can pay. In which case it is J&J which should be declaring bankruptcy, but that would block their ability to keep paying dividends to shareholders. > The only reason the court quashed it was because it wanted J&J to fight the individual or class action lawsuits Exactly. The judge saw through skeezy J&J attempt to use a sham bankruptcy to avoid the large payouts that can come from jury trials. Edit: Seriously, how can any person believe that J&J are doing this to make sure there is money to "fairly" pay all the victims while J&J is still paying some of the money that might be needed to pay victims as dividends to their shareholders. It is pretty darn extremely clear the J&J's primary goal is to reduce payouts and maximize shareholder value
- ankit219 3y ago
  > It creates fairness among victims by removing their rights to seek higher damages via their own court cases How is it fair if the first victim gets 10M in damages, but the 100,000th victim does not, given each lawsuit proceeds differently? It's obviously not a race, and getting less/more damages based on the order you filed a lawsuit is surely not the best way. (Damages via settlement or decided by jury). Even in the best case scenario where every victim gets a payout, they should get equal payout for similar damages. Also, the judge agreed with J&J's idea, but found the filing to be premature. That is even before they fought any lawsuit. Early is encouraged, premature is not. There is a distinction > We recognize the Code contemplates “the need for early access to bankruptcy relief to allow a debtor to rehabilitate its business before it is faced with a hopeless situation.” A “financially troubled” debtor facing mass tort liability, for example, may require bankruptcy to “enable a continuation of [its] business and to maintain access to the capital markets” even before it is insolvent. > Still, encouragement of early filing “does not open the door to premature filing.” This may be a fine line in some cases, but our bankruptcy system puts courts, vested with equitable powers, in the best position to draw it. The problematic part would have been had the money been capped. It's not, evidently. Then again, if you want to dissolve a company for one product, tell me what happens if tomorrow another product of theirs has some flaw, and now the victims cannot get anything for their damages?

onlypositive 3y ago

I'd rather see J&J go out of business entirely.

ankit219 3y ago
Okay. I think I don't care about J&J as long as victims are fairly compensated. For this one, and for any future victims that are affected by this product or any other product created by J&J.
- onlypositive 3y ago
  I'd rather there were no future victims.
dev_tty01 3y ago
I get the sentiment, but if I stop and think about it, I don't understand the math. I'm not intending to criticize since I struggle with this myself. Try on this hypothetical. Imagine that ten people in a giant company called ACME made some decisions that led to 50,000 people getting hurt. ACME also employs 100,000 hard working people, representing perhaps 0.3-0.4 million family members dependent upon that income. Imagine further that ACME's other products have dramatically improved the lives of hundreds of millions of other people. Given that scenario, does the ethical math really work for ACME to be completely destroyed? It is easy to see how the 10 decision makers should be punished. It is also easy to see how the people who were hurt should be compensated in some way. Destroying ACME entirely will harm lots of other people so it is not clear how to justify that. It is a very frustrating domain because we think of these companies as monoliths, but they are really just a large collection of mostly very decent people.
- tempest_ 3y ago
  Reads like a "too big to fail" argument. It works for the banking industry I guess so why not here too.
  - haswell 3y ago
    It’s unrelated in structured and substance to “too big to fail”. Too big to fail implies catastrophic harm worse than the (unpalatable) steps necessary to prop something up. This argument is really exploring the line between “company did something harmful” and “company did something so harmful they should no longer exist”. I’m not arguing for either, but TBTF is unrelated.
    - kevinventullo 3y ago
      I’m not sure I agree that the current argument is about whether the company did something so harmful they should no longer exist, but I agree that whatever it is, it is not the same as TBTF.
      - haswell 3y ago
        This was in response to a comment up the chain exploring the premise: > Given that scenario, does the ethical math really work for ACME to be completely destroyed? I agree that the broader conversation is not just about ceasing to exist, but this was the context of my comment.
- deleted 3y ago
  [deleted]
- ToValueFunfetti 3y ago
  >Imagine further that ACME's other products have dramatically improved the lives of hundreds of millions of other people. ACME has already been compensated financially for their products, so I don't think we should count them again in the ethical calculus.
- pessimizer 3y ago

shkkmo 3y ago

>In this case, filing for bankruptcy created fairness among victims, they did not have to be first or fifth to get the right damages, every victim was treated equal. It creates fairness among victims by removing their rights to seek higher damages via their own court cases. This "fairness" is only needed if the total amount of judgements exceeds what J&J can pay. In which case it is J&J which should be declaring bankruptcy, but that would block their ability to keep paying dividends to shareholders. > The only reason the court quashed it was because it wanted J&J to fight the individual or class action lawsuits Exactly. The judge saw through skeezy J&J attempt to use a sham bankruptcy to avoid the large payouts that can come from jury trials. Edit: Seriously, how can any person believe that J&J are doing this to make sure there is money to "fairly" pay all the victims while J&J is still paying some of the money that might be needed to pay victims as dividends to their shareholders. It is pretty darn extremely clear the J&J's primary goal is to reduce payouts and maximize shareholder value

ankit219 3y ago
> It creates fairness among victims by removing their rights to seek higher damages via their own court cases How is it fair if the first victim gets 10M in damages, but the 100,000th victim does not, given each lawsuit proceeds differently? It's obviously not a race, and getting less/more damages based on the order you filed a lawsuit is surely not the best way. (Damages via settlement or decided by jury). Even in the best case scenario where every victim gets a payout, they should get equal payout for similar damages. Also, the judge agreed with J&J's idea, but found the filing to be premature. That is even before they fought any lawsuit. Early is encouraged, premature is not. There is a distinction > We recognize the Code contemplates “the need for early access to bankruptcy relief to allow a debtor to rehabilitate its business before it is faced with a hopeless situation.” A “financially troubled” debtor facing mass tort liability, for example, may require bankruptcy to “enable a continuation of [its] business and to maintain access to the capital markets” even before it is insolvent. > Still, encouragement of early filing “does not open the door to premature filing.” This may be a fine line in some cases, but our bankruptcy system puts courts, vested with equitable powers, in the best position to draw it. The problematic part would have been had the money been capped. It's not, evidently. Then again, if you want to dissolve a company for one product, tell me what happens if tomorrow another product of theirs has some flaw, and now the victims cannot get anything for their damages?