supreme court

NJ among states seeking Supreme Court review of controversial bankruptcy tactic
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A bipartisan group of 25 attorneys general, including New Jersey’s Matthew Platkin, is urging the United States Supreme Court to stop well-off companies from using bankrupt shell companies to resolve lawsuits.

In a Jan. 22 amicus brief, the AGs asks for the reversal of a June 2023 ruling from the 4th U.S. Circuit Court of Appeals that allowed pulp-and-paper maker Georgia-Pacific to avoid litigating tens of thousands of asbestos lawsuits while the company’s subsidiary, Bestwall, remains in bankruptcy.

The 2-1 decision upheld a key element of a controversial legal tactic known as the Texas two-step, in which a corporation spins off liabilities into a newly created subsidiary and then files that unit for bankruptcy.

Georgia-Pacific, one of the world’s largest manufacturing firms, pioneered the strategy in 2017, which paused 64,000 lawsuits claiming the company’s plaster construction products contained cancer-causing asbestos.

In the brief, the AGs contend that Georgia-Pacific is abusing the U.S. bankruptcy system, using it to shield assets from people who have been harmed by preventing lawsuits from moving forward without subjecting the entire company to bankruptcy.

“Wealthy companies that engage in wrongdoing should not be able to get off the hook by cheating the

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January 31, 2024 by ATTORNEY

Purdue Pharma bankruptcy plan halted by SCOTUS

The U.S. Supreme Court on Thursday temporarily blocked Purdue Pharma’s plan to emerge from bankruptcy that shielded the founding Sackler families from liability in the nation’s opioid epidemic.

The application for a stay, brought by the U.S. Department of Justice, was presented to Justice Sonia Sotomayor and referred by her to the wider court, which agreed to hear argument on whether the nation’s bankruptcy laws allow a court to approve, as part of a plan of reorganization under Chapter 11, a release from litigation for third parties who are not themselves filing for bankruptcy.

A bankruptcy court judge had approved the reorganization plan for Purdue Pharma that reconstituted the company under another name while paying out billions of dollars to cities, states and Native American tribes afflicted by the opioid crisis — and insulated the descendants of the founding Sackler brothers from liability claims.

A federal judge in New York initially blocked the reorganization, however, ruling that bankruptcy laws do not allow liability shields to be given to parties that aren’t actually filing for bankruptcy.

An appellate court disagreed, reinstating the bankruptcy plan, and the DOJ asked the U.S. Supreme Court to intervene.

In a statement, Purdue Pharma

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August 12, 2023 by ATTORNEY

J&J Is Left Weighing Options After Second Talc Bankruptcy Tossed

Johnson & Johnson may be forced to pivot to other legal avenues to resolve tens of thousands of cancer claims after its latest bankruptcy court setback.

J&J cannot use the bankruptcy of its subsidiary, LTL Management LLC, to settle claims that its talc-based products, like baby powder, caused cancer, Judge Michael Kaplan of the US Bankruptcy Court for the District of New Jersey ruled July 28.

The ruling leaves J&J boxed out of its preferred venue to settle the claims, although the company said it would appeal. Aside from an appeal, J&J can settle individual claims, negotiate with plaintiff firms or pursue a global settlement.

J&J didn’t immediately respond to a request for comment. Lawyers pursuing claims against the company are weighing next steps, and some have said they are continuing to discuss a resolution with J&J.

Although it would be more challenging for the company to resolve all claims through mass tort litigation,“there are ways of resolving this outside of bankruptcy,” said Otterbourg PC attorney Adam Silverstein, who represents the official committee of claimants in the LTL bankruptcy.

LTL was not in “imminent and immediate financial distress” and therefore did not qualify for the benefits of bankruptcy, Kaplan ruled.

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August 4, 2023 by ATTORNEY

U.S. Supreme Court says bankruptcy law overrides tribal sovereignty

  • Justice Jackson ruled that bankruptcy law treats tribes the same as other governments
  • Tribe argued it was neither a “foreign” nor “domestic” government
  • Dispute centered on a tribe’s effort to collect an overdue $1,100 payday loan

NEW YORK (Reuters) – The U.S. Supreme Court ruled on Thursday that U.S. bankruptcy protections override a Native American tribe’s sovereign immunity, stopping the tribe’s effort to collect on an overdue payday loan taken out by one of its members who subsequently filed for bankruptcy.

In an 8-1 opinion written by Justice Ketanji Brown Jackson, the court ruled that U.S. bankruptcy law applies to all creditors and “abrogates the sovereign immunity of any and every government,” including tribes. Tribal governments are not entitled to an exception solely because the U.S. bankruptcy code does not specifically mention Indian tribes when describing how it applies to governments, Jackson wrote.

The Wisconsin-based Lac du Flambeau Band of Lake Superior Chippewa Indians had petitioned the Supreme Court after an appeals court rejected its effort to collect on a high-interest $1,100 payday loan extended to Brian Coughlin, a member of the tribe. Coughlin had borrowed the money from the tribe-owned business Lendgreen in 2019, but he filed for Chapter

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June 24, 2023 by ATTORNEY

Zali Burrows loses appeal

Burrows has represented former Auburn mayor Salim Mehajer, murderer Bassam Hamzy and terrorist Hamdi Alqudsi, and briefed counsel on behalf of several clients held in immigration detention in human rights cases. She stood as a candidate for the Palmer United Party in the seat of Blaxland in the federal election of 2013.

She filed a separate claim in the NSW Supreme Court on October 20 last year to have the $130,000 order against her set aside, alleging that Macpherson Kelley Lawyers had acted fraudulently in obtaining the order.

In December, she applied to the Federal Circuit and Family Court for an extension to the bankruptcy notice until that matter could be heard. However, Judge Nicholas Manousaridis dismissed her application, finding that she had “no reasonable prospects” of setting aside the judgment debt on any of her fraud claims.

Burrows has since lodged an amended statement of claim in the Supreme Court, alleging Macpherson Kelley made false statements to the court in 2020 when obtaining the $130,000 costs order. Macpherson Kelley say in their defence that part of the evidence they provided to the court was factually wrong but claim this was immaterial to the outcome.

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June 18, 2023 by ATTORNEY
April 2024
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