United States: What we read this week [February 17, 2022]
To print this article, all you need to do is be registered or log in to Mondaq.com.
As reported by Bloomberg, hearings began Monday to decide whether to dismiss Johnson & Johnson’s District of New Jersey bankruptcy case. Employing the so-called “Texas Two-Step” strategy, J&J used Texas law to create the subsidiary LTL Management to hold its talc-related liabilities. LTL then filed for bankruptcy, with a promise from J&J to fund a $2 billion trust, under a confirmed Chapter 11 plan, which would be used to pay the talc plaintiffs’ claims. J&J’s use of Texas Two-Step, as well as the pursuit of a similar strategy by other companies in recent years, has led some members of Congress to question whether legislation might be needed to restrict the strategy. [Bloomberg; Feb. 13, 2022]
CNBC reports that the consumer price index rose 7.5% in January, beating expert estimates and reflecting the highest level since February 1982. Rising inflation had a ripple effect on Wall Street in recent months, driving down futures, especially for rate-sensitive tech. equities, and the benchmark 10-year US Treasury note hitting 2%, the highest since August 2019. Consumers have also been hit hard by the significant rise in housing, vehicle and food costs over the past 12 last months. [CNBC; Feb. 10, 2022]
By CNN Business, the Dow Jones, S&P 500 and Nasdaq surged on February 15 after Russia announced the withdrawal of some troops near Ukraine, suggesting a potential de-escalation in the region. Sources have suggested that an armed conflict between Russia and Ukraine could lead to global disruption of energy supplies and further price hikes given that Russia is a major exporter of natural gas and oil. Prior to Russia’s announcement, the Dow Jones and S&P 500 had fallen for three days in a row, and more volatility is expected as the situation continues to develop. [CNN Business;
Feb. 15, 2022]
Visit us at mayerbrown.com
Mayer Brown is a global provider of legal services comprised of law firms that are separate entities (the “Mayer Brown Firms”). The Mayer Brown firms are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, two limited liability companies established in Illinois in the United States; Mayer Brown International LLP, a limited company incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales under number OC 303359); Mayer Brown, a SELAS based in France; Mayer Brown JSM, a partnership of Hong Kong and its associated entities in Asia; and Tauil & Checker Advogados, a Brazilian legal partnership with which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are registered trademarks of Mayer Brown law firms in their respective jurisdictions.
© Copyright 2020. Mayer Brown Practices. All rights reserved.
This article by Mayer Brown provides information and commentary on interesting legal issues and developments. The foregoing is not a complete treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action regarding the matters discussed here.
POPULAR ARTICLES ON: Insolvency/Bankruptcy/Restructuring from the United States