Below is our quick take on recent bankruptcy-related developments:
The talc claimants committee, the group suing Johnson & Johnson for asbestos-tainted talcum powder, claimed J&J’s strategic use of the “Texas two-step” bankruptcy tactic to silo the talc liability with its new entity was a bad faith filing.
S&K Take: The talc claimants made good on their promise to seek dismissal of the LTL bankruptcy case as a bad faith filing. The interesting part is that the facts and the intent don’t seem to be in dispute. LTL was created and filed solely to deal with talc-related liabilities. The question for Judge Kaplan is whether that is a permitted bankruptcy purpose. Hearing on the motion is set for February.
Hip-hop entrepreneur Sean “Diddy” Combs has bid $3.3 million to buy the assets of Sean John, the fashion and lifestyle brand he founded in 1998, out of bankruptcy.
S&K Take: Always fun when bankruptcy news is reported by TMZ. Puff Daddy/P Diddy/Diddy is set to act as the stalking horse in an attempt to buy back the Sean John brand. Will be interesting to see what competition arises, if any. Cash purchase price ($3.3 million) seems on the low side for what the Debtors called their “crown jewel” brand, but we admittedly haven’t “combed” through the entire APA yet to see what other value is included (see what we did there?).
Following its recovery from bankruptcy, Hertz Global announced a plan this week to buy back as much as $2 billion of its stock, starting with $200 million of repurchases.
S&K Take: The hits just keep on coming for Hertz shareholders.
Twenty years ago on December 2, Enron filed for bankruptcy, which was the largest in U.S. history at the time.
S&K Take: Little bit of mainstream bankruptcy nostalgia today. Yours truly has some fond memories of Enron litigation doc review in the golden era of corporate fraud cases.
Elon Musk, CEO of SpaceX, warned the company could face the “risk of bankruptcy” due to a lack of progress on engines created.
S&K Take: Elon is always good for an interesting comment. This one seems like it would be a ways off, but you never know I guess?