What We’re Reading This Week [April 1, 2022]
Talc claimants should have their appeal of a decision permitting J&J-subsidiary LTL Management to continue its Chapter 11 proceedings heard as soon as possible, according to the same bankruptcy judge that issued the decision. In February, Judge Michael Kaplan of the U.S. Bankruptcy Court of New Jersey permitted the company to stay in Chapter 11, finding that bankruptcy proceedings were a legitimate tool to resolve mass tort liability. Judge Kaplan’s recent decision will allow talc claimants to bypass the federal district court and have their appeal of that decision heard directly by the Third Circuit Court of Appeals, as reported by the Wall Street Journal.
The S.E.C. voted on March 30 to propose new rules for special purpose acquisition companies (SPACS) that would bring disclosure requirements for SPACs more in line with traditional I.P.O.s, according to the New York Times. Activity in the SPAC market has significantly cooled, with only 50 SPACs raising $10 billion so far this year, compared with more than 600 SPACs raising about $160 billion in 2021. Additionally, a fund that is indexed to hundreds of SPACs has lost about half of its value since it peaked in early 2021.
Insurers are opposing a Chapter 11 plan proposed by the Boy Scouts of America arguing that they were improperly excluded from plan negotiations and will be left to shoulder the burden of paying out on claims that they will not have the ability to verify, according to Bloomberg. The insurers’ experts testified that each individual should go through a sexual-abuse evaluation, in order to cull out “the bogus cases that have kind of jumped on the wagon because they saw something on Facebook” and make sure that the actual victims are compensated.
Forbes discusses what the Fed’s current and planned interest hikes will mean for private equity portfolios, and the potential for increased bankruptcies among private-equity backed companies. Such companies have largely avoided bankruptcy of late, with only 79 private-equity backed companies having filed for bankruptcy in 2021 and only 18 so far in 2022.
