In re LTL Management, LLC: Third Circuit Holds Texas Two-Step Bankruptcy Not Filed in Good Faith When Debtor is Not in Financial Distress | Practical Law
In In re LTL Management, LLC, the US Court of Appeals for the Third Circuit dismissed the bankruptcy petition of LTL, an entity formed to isolate talc-related personal injury liabilities of Johnson & Johnson (J&J). The appellate court concluded that because LTL could be indemnified by a still-operating successor to J&J, up to the full value of the company – $61 billion as of the petition date – LTL was not in financial distress and did not qualify for the protections of bankruptcy.