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How can they get a fine this small for a dangerous product they pushed onto markets globally for several decades? There really should be retroactive punishment

How can they get a fine this small for a dangerous product they pushed onto markets globally for several decades? There really should be retroactive punishment and fines for past executives and clawing back of money from them and past shareholders. Also am I reading this right? J&J formed a subsidiary that’ll absorb these liabilities? How is that legal? What happens if that subsidiary disappears? Couldn’t any company conceivably let go of their liabilities by putting it in some other company?

JumpCrisscross 3y ago
> What happens if that subsidiary disappears? Couldn’t any company conceivably let go of their liabilities by putting it in some other company? No, that’s fraud. This is a way to use bankruptcy to pay out claims versus reduce them—the parent company guarantees the subsidiary’s liabilities.
alt227 3y ago
The courts seem to have some power here, see this quote from the article: >The company tried filing LTL in bankruptcy twice before — and both times the case was rejected as courts ruled the parent company was financially capable of paying the claims without bankruptcy protection.
surfingdino 3y ago
The subsidiary will pay out the settlement and go bankrupt without affecting the parent company's stock price.
- lotsofpulp 3y ago
  Where does the subsidiary get $6.5B from?
  - surfingdino 3y ago
    The parent company.
    - lotsofpulp 3y ago
      Surely investors value parent company less if the company has $6.5B less than they would if the same company had $6.5B more.
      - carbotaniuman 3y ago
        Yes, but compared to the alternative where the parent company is responsible for an unknown amount of liabilities, capping ones liabilities at 6.5 billion might be better for shareholders.
      - surfingdino 3y ago
        Are film studios valued less after a blockbuster? And yet, almost every US movie, good or not has a company set up for it and that company spends cash and gets closed down after filming ends. So they cannot be sued and the studios cannot be sued. It's a good old US tradition.
davisr 3y ago
This was their plan. I encourage you, and everyone who is a US citizen, to write/call your representatives. Tell them you want corporate heads to have personal liability for these issues. Tell them to dispose of Citizens United.
hiatus 3y ago
> Also am I reading this right? J&J formed a subsidiary that’ll absorb these liabilities? How is that legal? What happens if that subsidiary disappears? Couldn’t any company conceivably let go of their liabilities by putting it in some other company? Also know as the Texas two-step. https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy

JumpCrisscross 3y ago

> What happens if that subsidiary disappears? Couldn’t any company conceivably let go of their liabilities by putting it in some other company? No, that’s fraud. This is a way to use bankruptcy to pay out claims versus reduce them—the parent company guarantees the subsidiary’s liabilities.

alt227 3y ago

The courts seem to have some power here, see this quote from the article: >The company tried filing LTL in bankruptcy twice before — and both times the case was rejected as courts ruled the parent company was financially capable of paying the claims without bankruptcy protection.

surfingdino 3y ago

The subsidiary will pay out the settlement and go bankrupt without affecting the parent company's stock price.

lotsofpulp 3y ago
Where does the subsidiary get $6.5B from?
- surfingdino 3y ago
  The parent company.
  - lotsofpulp 3y ago
    Surely investors value parent company less if the company has $6.5B less than they would if the same company had $6.5B more.
    - carbotaniuman 3y ago
      Yes, but compared to the alternative where the parent company is responsible for an unknown amount of liabilities, capping ones liabilities at 6.5 billion might be better for shareholders.
    - surfingdino 3y ago
      Are film studios valued less after a blockbuster? And yet, almost every US movie, good or not has a company set up for it and that company spends cash and gets closed down after filming ends. So they cannot be sued and the studios cannot be sued. It's a good old US tradition.

davisr 3y ago

This was their plan. I encourage you, and everyone who is a US citizen, to write/call your representatives. Tell them you want corporate heads to have personal liability for these issues. Tell them to dispose of Citizens United.

hiatus 3y ago

> Also am I reading this right? J&J formed a subsidiary that’ll absorb these liabilities? How is that legal? What happens if that subsidiary disappears? Couldn’t any company conceivably let go of their liabilities by putting it in some other company? Also know as the Texas two-step. https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy