Firm Successfully Opposes Challenge to Bankruptcy Court Jurisdiction in Chapter 11 Case

The Firm is co-counsel for LTL Management LLC, a subsidiary of Johnson & Johnson, in LTL’s Chapter 11 case in the United States Bankruptcy Court for the District of New Jersey. The purpose of the Chapter 11 case is to resolve certain claims related to cosmetic talc in a manner that is equitable to all parties, including any current and future claimants.

The Firm recently opposed a motion filed by the creditors, comprised primarily of personal injury claimants, in the District Court that sought to remove a critical adversary proceeding from the Bankruptcy Court. The adversary proceeding sought to extend the Bankruptcy Code’s automatic stay of claims against LTL to also enjoin prosecution of claims against LTL’s parent (Johnson & Johnson), affiliates, suppliers and other key co-defendants. The movants argued to the District Court that the issues raised in the adversary proceeding were not “core” bankruptcy proceedings and, thus, should be addressed first by the District Court rather than the Bankruptcy Court.

The District Court denied the creditors’ motion on an expedited basis, holding that the Bankruptcy Court was the appropriate initial forum. In the opinion, the District Court emphasized the “core” nature of the automatic stay determination, as well as the lack of legal authority supporting the creditors’ contention that proceeding was not “core,” and further concluded that LTL amply demonstrated that the Bankruptcy Court’s exercise of jurisdiction met established Third Circuit precedent.

A copy of the District Court’s decision can be found here.