What We’re Reading This Week [January 24, 2022]
Reuters reports that a district court judge has deferred to the bankruptcy court on whether Johnson & Johnson is entitled to the continuing protection of the Bankruptcy Code’s automatic stay from mass tort lawsuits that it would otherwise face relating to its talc products while its subsidiary, LTL Management, proceeds through bankruptcy. A committee of talc claimants appointed in LTL Management’s case had moved to “withdraw the reference” of that decision from the bankruptcy court, arguing that the matter would be more appropriately decided by the district court. The district court disagreed, finding that the reach of the automatic stay was a matter within the core jurisdiction of a bankruptcy court. [Reuters; Jan. 12, 2022].
The Financial Times reports that the Houston Division of the Southern District of Texas has become a magnet for mega chapter 11 bankruptcy cases, challenging more traditional jurisdictions like Delaware and the Southern District of New York. In 2021, a third of all U.S. bankruptcy filings where the debtor’s liabilities exceeded $500 million were filed in Houston. Major cases filed in Houston include JC Penney, Neiman Marcus, and Chesapeake Energy. [Financial Times ; Jan. 11, 2022]
Reporting from the Wall Street Journal indicates that the Federal Reserve has concerns about rising inflation in the U.S. Federal Reserve Chair Jerome Powell called high inflation a “severe threat” to full economic recovery and said that the central bank plans to raise interest rates because the economy no longer needs emergency support. However, Powell also stated he is optimistic that supply-chain bottlenecks will ease, helping to lower inflation. [WSJ; Jan. 11, 2022]
