Bank­rupt­cy judge: J&J can spin talc pow­der in­to dif­fer­ent com­pa­ny, po­ten­tial­ly slow­ing plain­tiff­s' pay­outs

In Ju­ly, word got out that J&J was look­ing to ex­er­cise a loop­hole that would al­low the com­pa­ny to of­fload li­a­bil­i­ties stem­ming from a law­suit con­nect­ed to as­bestos in its ba­by pow­der. A fed­er­al judge has now al­lowed the com­pa­ny to make that move, in a de­ci­sion that could lead the com­pa­ny to split off thou­sands of claims in­to a small­er com­pa­ny that files for bank­rupt­cy.

US bank­rupt­cy judge Lau­rie Sel­ber Sil­ver­stein made the rul­ing Thurs­day in Delaware, Reuters re­port­ed. The com­pa­ny will now be able to use a Texas “di­vi­sive merg­er” law, which al­lows a com­pa­ny to split in­to two en­ti­ties, and has been used by oth­er com­pa­nies that face as­bestos lit­i­ga­tion, Reuters said.

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