Professor Melissa Jacoby of the University of North Carolina at Chapel Hill on the latest Fresh Start podcast discussed the limits of bankruptcy in handling mass tort cases and the recent filings of Purdue Pharma LP and others.
There’s been public outrage and new legislation questioning the limits of Chapter 11 following not only the Chapter 11 filing of Purdue Pharma but Boy Scouts of America, USA Gymnastics and others in the past few years, and now the very recent filing of newly formed Johnson & Johnson (JNJ) unit LTL Management LLC.
On the episode, Jacoby reflected on working alongside Sen. Elizabeth Warren, D-Mass., with the focus in Chapter 11 as it related to mass tort liabilities protecting future claimants. But the issues surrounding these filings have changed significantly since then.
“Certainly, equity among past and present and future claimants does not seem to be a driver of conversations about the cases that you mention,” Jacoby said, referring to Purdue and Boy Scouts. “They’re about litigation management, they’re about maximizing economic value for healthy companies.”
Later, she said that Chapter 11 “wasn’t meant to be an alternative justice system” for companies facing mass tort liabilities. She also discussed the issue of equitable mootness, inequity in the bankruptcy system, the venue choices of these cases, appeals in Purdue and more.
Listen to the podcast below: