This is how it works, at least in this case. J&J is liable for the full liabilities of the new child company. The child exists to make sure a pool of at least

This is how it works, at least in this case. J&J is liable for the full liabilities of the new child company. The child exists to make sure a pool of at least its current assets exists to split between all claimants. If they’re found to be liable for more than that, then J&J will be liable for it and, if they can’t service that liability, they will have to declare bankruptancy.