Courts, Congress Likely To Stand In Way Of J&J's Third Texas Two-Step Plan; U.S. Court Of Appeals For 3rd Circuit Latest To Reject Unprecedented Bankruptcy Strategy; Lawyers On Behalf Of Ovarian Cancer Victims Are Calling On Johnson & Johnson To End Its "War Of Attrition Against Cancer Victims."
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The U.S. Court of Appeals for the 3rd Circuit has rejected Johnson & Johnson's (NYSE:JNJ) third attempt at using the Texas Two-Step bankruptcy strategy to manage its talc liabilities. Lawyers representing ovarian cancer victims are urging J&J to provide fair compensation. Additionally, new legislation, the Ending Corporate Bankruptcy Abuse Act (ECBA) of 2024, has been introduced to ban such strategies.
July 26, 2024 | 1:42 pm
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The U.S. Court of Appeals for the 3rd Circuit has rejected Johnson & Johnson's third attempt at using the Texas Two-Step bankruptcy strategy to manage its talc liabilities. This legal setback, combined with new legislation aimed at banning such strategies, could pressure J&J to provide fair compensation to victims.
The court's rejection of J&J's bankruptcy strategy and the introduction of new legislation to ban such practices are significant legal and regulatory setbacks. These developments could lead to increased financial liabilities and reputational damage for J&J, negatively impacting its stock price in the short term.
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