Clifford Chance

Third Circuit Dismisses Mass Tort Chapter 11 Filed by J&J Subsidiary

February 2, 2023

In recent years, it has become almost commonplace for companies facing mass tort liability in the US to turn to US bankruptcy courts to provide a central forum to address present and future liabilities. Purdue Pharma, Boy Scouts of America, Imerys Talc, Aearo Technologies (a 3M subsidiary) and others have sought such protection because, among other reasons, the US Bankruptcy Code offers powerful tools that can be used to stay litigation, negotiate global settlements, bind holdouts and future claimants and estimate current and future liabilities. In contrast to what some consider an overburdened and unfair tort system, US bankruptcy courts may be able to efficiently and equitably resolve matters that otherwise could languish for years and result in vast inequities amongst claimants, although some critics have argued that Chapter 11 should not be used as a means to displace tort claimants' "day in court."

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