Corporate Lawsuit Dodge Imperiled After Court Rejects J&J Bankruptcy Tactic

Corporate Lawsuit Dodge Imperiled After Court Rejects J&J Bankruptcy Tactic
The Johnson & Johnson logo on a screen on the floor of the New York Stock Exchange in New York on May 29, 2019. Brendan McDermid/Reuters
Reuters
Updated:

Attorney Greg Gordon, a partner at the Jones Day law firm, offered an innovative solution to Johnson & Johnson and other major companies that faced mountains of lawsuits alleging their products sickened or killed people: They could use the bankruptcy system to force all plaintiffs into one settlement.

It required fancy legal footwork—creating a subsidiary to shoulder all the liability, then putting that new company into Chapter 11.