Johnson & Johnson (“J&J”) sold baby powder for decades.

Today, J&J is facing tens of thousands of lawsuits alleging that its baby powder causes cancer. And the number of new cancer claimants is increasing daily—with many thousands yet to be identified over decades to come.

So, J&J turns to bankruptcy to address this litigation threat, to protect future claimants, and to protect the going concern value of its global operations. [Fn. 1]

A discharge in bankruptcy usually discharges a debtor from the debtor’s liabilities. Section 523 of the Bankruptcy Code, however, sets forth certain exceptions to this policy, including for “any debt . . . for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by . . . false pretenses, a false representation, or actual fraud. . . .” 11 U.S.C. § 523(a)(2)(A).

On May 6, the U.S. Court of Appeals for the First Circuit reversed a district court’s decision, ruling that American tribes are not exempt from federal law barring suits against debtors once they file for bankruptcy.

Here are a couple long-standing and foundational policies for the entire bankruptcy system:

• Bankruptcy laws protect the honest but unfortunate debtor; and
• Discharge exceptions are to be strictly construed against the objecting creditor and liberally construed in favor of debtor.

So, for all my decades of practice under the Bankruptcy Code, this idea has held sway: an honest debtor is entitled to a bankruptcy discharge.

As we previously reported, certain temporary bankruptcy code amendments that U.S.

What do the Dodgers, American Apparel, Rubio’s Fish Tacos, California Pizza Kitchen, MGM Studios, and Pacific Sunwear have in common? Each is an iconic Southern California brand. But that’s not all they have in common. According to statistics, over the last 20 years 143 California based companies having over $32 billion in assets, and over 211,000 employees have filed bankruptcy in Delaware alone. These companies are members of a growing list of California companies that strategically elected to file for bankruptcy outside of California.

Does a rotten tree produce good fruit?

That’s the bankruptcy issue before the U.S. Supreme Court in Siegel v. Fitzgerald, where the Question is this:

“Whether the Bankruptcy Judgeship Act violates the uniformity requirement of the Bankruptcy Clause by increasing quarterly fees solely in U.S. Trustee districts.”

Note:

BUSINESS RESTRUCTURING REVIEW VOL. 21 • NO.

As discussed in an earlier post called “Moving Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2022,” various dollar amounts in the Bankruptcy Code and related statutory provisions were increased for cases filed on or after today, April 1, 2022.

Chapter 15 of the U.S. Bankruptcy Code provides a streamlined process for recognition (a form of comity) of a foreign insolvency proceeding. However, courts are divided as to whether a foreign debtor must satisfy the general definition of “debtor” as that term is used in section 109(a) of the Bankruptcy Code, which requires a debtor seeking bankruptcy relief to reside or have a domicile, a place of business, or property in the United States.