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    Bill Introduced in Congress to End Executive Bonuses in Bankruptcy and More

    What's News
    October 15, 2021

    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.

    The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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