Below is our initial take on some of the major bankruptcy-related developments from the past week:
Bill Introduced in Congress to End Executive Bonuses in Bankruptcy | Reuters
On the heels of the report from the Government Accountability Office which found that $165 million in bonuses were paid to executives in 2020 on the eve of company bankruptcies (we mentioned the GAO report here), a bill was introduced in the US House of Representatives to curtail the practice. It is actually a revision of a bill originally introduced in 2019. We can’t recall a time where bankruptcy laws have received more mainstream attention – between third party releases, venue, bonuses and the Texas two-step (see below), bankruptcy has been a Congressional topic du jour.
Johnson & Johnson Puts Talc Liabilities into Bankruptcy | CNBC
J&J finally pulled the trigger on step two in the ol’ Texas two-step (we discussed in detail here). This will be one to watch – J&J is purportedly putting up $2 billion to fund a trust plus certain revenue streams they value at $350 million for expenses. Will that be enough to satiate claimants? The answer to that is typically a hard “no,” but we will see.
U.S. Supply Chain Too Snarled for Biden Christmas Fix, Experts Say | Reuters
Any professional will tell you that restructuring and bankruptcy have been slow – historically so. One thing to keep an eye on are supply chain issues. If not resolved, could these be a catalyst for more distressed situations? Could have a significant impact, both direct and indirect.