‘Mass Exploitation’

“Modern mass tort defendants – including Johnson & Johnson, Purdue Pharma, USA Gymnastics, and Boy Scouts of America – have developed unprecedented techniques for resolving mass tort cases; innovation coupled with exploitation. Three weapons in this new arsenal are particularly noteworthy. Before a filing, divisive mergers allow mass tort defendants to access bankruptcy on their terms. Texas state law allows a corporation to divide into two separate entities and freely allocate assets and liabilities between these new entities. Defendants are using this corporate mitosis to isolate mass tort liabilities in one subsidiary and then have that entity file for bankruptcy while keeping the rest of the corporate empire outside the process …” (more)

[Samir D Parikh, Oxford Business Law Blog, 25 October]

First posted 2021-10-26 12:00:34

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