Corporations and bankruptcy

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gounion
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Corporations and bankruptcy

Post by gounion »

Corporations in America are corrupt. It's that simple. The system we've built invites corruption.

Let's just look at Johnson & Johnson, a corporation that JoeMemphis says is a great and honest company. Not really:
Johnson & Johnson is drawing criticism after using a controversial bankruptcy maneuver to block roughly 38,000 lawsuits linked to claims that its talc baby powder was contaminated with cancer-causing asbestos.

The health products giant used a quirk of Texas state law to spin off a new company called LTL, then dumped all its asbestos-related liabilities — including the avalanche of lawsuits — into the new firm.

LTL filed for bankruptcy last week in a federal court in Charlotte, N.C., a move designed to sharply limit efforts to recover damages for those who say they were harmed by J&J's baby powder.

"Johnson & Johnson doesn't have this liability anymore. They pushed all of it into the company they created just to file for bankruptcy," said Lindsey Simon, a bankruptcy expert at the University of Georgia School of Law.

As a result, Simon said, "consumers can't recover [damages] against a big solvent company. They have to recover against this smaller fictional company created [by J&J]."
This is also how "vulture capitalists" like Mitt Romney operates - they use bankruptcy to avoid debt. Buy a struggling company with debt, pay yourself huge fees for running the company, sell off all profitable or valuable assets, then run the worthless shell through bankruptcy so you don't have to pay the debt you borrowed to buy the company with to start with.

This isn't unusual, it's normal.
Glennfs
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Re: Corporations and bankruptcy

Post by Glennfs »

gounion wrote: Tue Oct 26, 2021 4:04 pm Corporations in America are corrupt. It's that simple. The system we've built invites corruption.

Let's just look at Johnson & Johnson, a corporation that JoeMemphis says is a great and honest company. Not really:



This is also how "vulture capitalists" like Mitt Romney operates - they use bankruptcy to avoid debt. Buy a struggling company with debt, pay yourself huge fees for running the company, sell off all profitable or valuable assets, then run the worthless shell through bankruptcy so you don't have to pay the debt you borrowed to buy the company with to start with.

This isn't unusual, it's normal.
So what do you believe J and J should do. Go out of business sell off their assets to pay the lawsuits. Putting 10s of thousands out of work while causing a mini crisis on wall street.
I admit it is a Sophie's choice unless you could offer an alternative
" I am a socialist " Bernie Sanders
gounion
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Re: Corporations and bankruptcy

Post by gounion »

Glennfs wrote: Tue Oct 26, 2021 4:32 pm So what do you believe J and J should do. Go out of business sell off their assets to pay the lawsuits. Putting 10s of thousands out of work while causing a mini crisis on wall street.
I admit it is a Sophie's choice unless you could offer an alternative
My wife has two brothers and a sister. One brother we're close to. But her other brother quit his job and they moved up into the hills in northern Georgia. My wife told me the other day they had a real problem up there. He pulled all his savings and his 401(k) to build a house up in the mountains. She said he hired a company, paid in advance, no loan, and they ran way behind and built about a quarter of it. Then the guy told him he ran out of money and couldn't finish it.

Of course, he said he would sue him. The guy told him "that's not how we do things around here." I guess his corporation just went bankrupt and he started a new one and is still building houses.

Johnson and Johnson knew they were selling poison, and didn't care. They should be held accountable.

Or don't you believe in accountability?

Tell you what - here's an alternative - If companies like Johnson and Johnson commit crimes, the leadership should be held criminally responsible. Remember that Johnson and Johnson killed tens of thousands by how they marketed their opiods. Put those responsible in prison for life, and the next bunch might think twice.

But no, they should NOT be able to escape accountability through legal bankruptcy trickery.
Glennfs
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Re: Corporations and bankruptcy

Post by Glennfs »

gounion wrote: Tue Oct 26, 2021 4:42 pm My wife has two brothers and a sister. One brother we're close to. But her other brother quit his job and they moved up into the hills in northern Georgia. My wife told me the other day they had a real problem up there. He pulled all his savings and his 401(k) to build a house up in the mountains. She said he hired a company, paid in advance, no loan, and they ran way behind and built about a quarter of it. Then the guy told him he ran out of money and couldn't finish it.

Of course, he said he would sue him. The guy told him "that's not how we do things around here." I guess his corporation just went bankrupt and he started a new one and is still building houses.

Johnson and Johnson knew they were selling poison, and didn't care. They should be held accountable.

Or don't you believe in accountability?

Tell you what - here's an alternative - If companies like Johnson and Johnson commit crimes, the leadership should be held criminally responsible. Remember that Johnson and Johnson killed tens of thousands by how they marketed their opiods. Put those responsible in prison for life, and the next bunch might think twice.

But no, they should NOT be able to escape accountability through legal bankruptcy trickery.
That "solution " doesn't offer any solutions to the financial situation.
As for being jailed because people abuse their products I guess that would include every beer and spirits manufacturers also, and cigarettes and casinos
But, back to the main question how do you propose J and J pay off the lawsuit debt
" I am a socialist " Bernie Sanders
gounion
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Re: Corporations and bankruptcy

Post by gounion »

Glennfs wrote: Tue Oct 26, 2021 4:52 pm That "solution " doesn't offer any solutions to the financial situation.
As for being jailed because people abuse their products I guess that would include every beer and spirits manufacturers also, and cigarettes and casinos
But, back to the main question how do you propose J and J pay off the lawsuit debt
I suggest they pay it off. They get their day in court. Why does that bother you?

And no, the opioid thing is completely different. It killed a half a million people. They knew how addictive these drugs were, and the marketed them and pushed doctors to prescribe them for all kinds of stuff. They were pushing these things out and knew that some pharmacies were putting something like 100 pills a month for every man, woman and child out in some counties. And they knew it.

No, this was murder, pure and simple.
Glennfs
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Re: Corporations and bankruptcy

Post by Glennfs »

The opioid settlement is 26 billion would you like that in cash or a check.
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gounion
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Re: Corporations and bankruptcy

Post by gounion »

Glennfs wrote: Tue Oct 26, 2021 5:11 pm The opioid settlement is 26 billion would you like that in cash or a check.
Johnson and Johnson settlement is only five billion, over seven years.

From a company that made $15.3 billion in 2018 alone.

They've made a lot more from opioids than that.

It's like if you could rob a bank, and if caught, they couldn't imprison you. All they could do is fine you. AND you could keep all the money you stole, and the fine is only a small percentage of that.

Why wouldn't you become a bank robber?

These fines are just a small cost of doing business.
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Libertas
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Re: Corporations and bankruptcy

Post by Libertas »

Not being allowed to negotiate prices with RX companies is madness.

I wonder which political ideology thinks that is a good idea!
I sigh in your general direction.
gounion
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Re: Corporations and bankruptcy

Post by gounion »

Libertas wrote: Tue Oct 26, 2021 6:04 pm Not being allowed to negotiate prices with RX companies is madness.

I wonder which political ideology thinks that is a good idea!
Biden's Build Back Better re-institutes the right of the government to do so. Which is one of the reasons Glenn and the entire GOP is against it.
Glennfs
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Re: Corporations and bankruptcy

Post by Glennfs »

Libertas wrote: Tue Oct 26, 2021 6:04 pm Not being allowed to negotiate prices with RX companies is madness.

I wonder which political ideology thinks that is a good idea!
On this we agree but, let's not forget that democratic lawmakers from states that manufacture RX drugs are opposed
" I am a socialist " Bernie Sanders
Glennfs
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Re: Corporations and bankruptcy

Post by Glennfs »

gounion wrote: Tue Oct 26, 2021 6:05 pm Biden's Build Back Better re-institutes the right of the government to do so. Which is one of the reasons Glenn and the entire GOP is against it.
https://www.rollcall.com/2017/01/12/pro ... om-canada/

13 Democrats including Cory Booker opposed this
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gounion
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Re: Corporations and bankruptcy

Post by gounion »

Glennfs wrote: Tue Oct 26, 2021 6:08 pm https://www.rollcall.com/2017/01/12/pro ... om-canada/

13 Democrats including Cory Booker opposed this
Really?

I didn't know Biden put Build Back Better up for a vote in 2017.

Wipe the egg off your face.
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Libertas
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Re: Corporations and bankruptcy

Post by Libertas »

gounion wrote: Tue Oct 26, 2021 6:14 pm Really?

I didn't know Biden put Build Back Better up for a vote in 2017.

Wipe the egg off your face.
I would think that would make your friend a fan of those Democrats. I bet he isnt though.

What cons dont understand is we support right vs wrong, not party.
I sigh in your general direction.
gounion
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Re: Corporations and bankruptcy

Post by gounion »

Libertas wrote: Tue Oct 26, 2021 6:17 pm I would think that would make your friend a fan of those Democrats. I bet he isnt though.

What cons dont understand is we support right vs wrong, not party.
He's against anything the Dems want to do, including allowing the government to negotiate prices on prescription drugs.
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Libertas
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Re: Corporations and bankruptcy

Post by Libertas »

gounion wrote: Tue Oct 26, 2021 6:20 pm He's against anything the Dems want to do, including allowing the government to negotiate prices on prescription drugs.
The dems are the adults, every thing they do helps him, everything the gop does hurts him, but he supports the gop because he hates liberals and now progressives.

He doesnt know why, but he does. He advocates for the richest to have everything at his expense.
I sigh in your general direction.
JoeMemphis

Re: Corporations and bankruptcy

Post by JoeMemphis »

gounion wrote: Tue Oct 26, 2021 4:04 pm Corporations in America are corrupt. It's that simple. The system we've built invites corruption.

Let's just look at Johnson & Johnson, a corporation that JoeMemphis says is a great and honest company. Not really:



This is also how "vulture capitalists" like Mitt Romney operates - they use bankruptcy to avoid debt. Buy a struggling company with debt, pay yourself huge fees for running the company, sell off all profitable or valuable assets, then run the worthless shell through bankruptcy so you don't have to pay the debt you borrowed to buy the company with to start with.

This isn't unusual, it's normal.
In many of the cases, those companies were well on the road to bankruptcy and their last resort was venture capital. In others, it was a startup that couldn’t get capital. There are many businesses that can’t walk into the local bank and borrow money. If they had options for cheaper money, they would take it.

So they end up with a venture capital firm. A firm that makes high risk investments. They anticipate high returns in exchange. In those situations, the venture capitalist takes a preferred secure creditor position. If you borrow such money and are successful then you win, if you are not successful then you lose. The venture capital guy, like any other creditor is looking after his investment and his return. It is no different than a debtor in possession loan in bankruptcy. It’s the same position the government was in during the GM bankruptcy.

The folks who enter into these deals aren’t stupid. They understand the risks. Other creditor who continue to deal with these companies also understand the risks. If you are in business and you loan money or otherwise extend credit, you should understand the risk or go work for someone else.

I have been thru similar transactions myself. Most (not all) businesses who go for high risk money can’t borrow anywhere else. If they could they would. If they don’t get the money, they just end up in bankruptcy anyway. A certain number of the folks who go to venture capital do make it. Others don’t. Not everybody wins in business.
Bludogdem
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Re: Corporations and bankruptcy

Post by Bludogdem »

There are 35,000 lawsuits. Some they win & some they loose. J&J has won the last 5. However, they aren’t particularly interested in that many lawsuits. Here’s the basics of the new subsidiary.

"We are taking these actions to bring certainty to all parties involved in the cosmetic talc cases," said Michael Ullmann, Executive Vice President, General Counsel of Johnson & Johnson. "While we continue to stand firmly behind the safety of our cosmetic talc products, we believe resolving this matter as quickly and efficiently as possible is in the best interests of the Company and all stakeholders."

To demonstrate its commitment to resolving the cosmetic talc cases and remove any financial objections to the process,Johnson & Johnson has agreed to provide funding to LTL for the payment of amounts the Bankruptcy Court determines are owed by LTL and will also establish a $2 billion trust in furtherance of this purpose. In addition, LTL has been allocated certain royalty revenue streams with a present value of over $350 million to further contribute to potential costs.

John Kim, Chief Legal Officer of LTL, said, "With the financial backing of Johnson & Johnson, coupled with a dedicated trust and significant financial resources supporting LTL, we are confident all parties will be treated equitably during this process."

https://www.prnewswire.com/news-release ... 00916.html

A commitment to fund what the courts decide.
gounion
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Re: Corporations and bankruptcy

Post by gounion »

JoeMemphis wrote: Tue Oct 26, 2021 6:39 pm In many of the cases, those companies were well on the road to bankruptcy and their last resort was venture capital. In others, it was a startup that couldn’t get capital. There are many businesses that can’t walk into the local bank and borrow money. If they had options for cheaper money, they would take it.

So they end up with a venture capital firm. A firm that makes high risk investments. They anticipate high returns in exchange. In those situations, the venture capitalist takes a preferred secure creditor position. If you borrow such money and are successful then you win, if you are not successful then you lose. The venture capital guy, like any other creditor is looking after his investment and his return. It is no different than a debtor in possession loan in bankruptcy. It’s the same position the government was in during the GM bankruptcy.

The folks who enter into these deals aren’t stupid. They understand the risks. Other creditor who continue to deal with these companies also understand the risks. If you are in business and you loan money or otherwise extend credit, you should understand the risk or go work for someone else.

I have been thru similar transactions myself. Most (not all) businesses who go for high risk money can’t borrow anywhere else. If they could they would. If they don’t get the money, they just end up in bankruptcy anyway. A certain number of the folks who go to venture capital do make it. Others don’t. Not everybody wins in business.
Yet most of these firms win even when they lose. Mitt would make millions off of companies he put through bankruptcy.

He rigs the game.

I note you didn't comment on the main part of my OP, the company you say is a great company, Johnson and Johnson.
JoeMemphis

Re: Corporations and bankruptcy

Post by JoeMemphis »

JoeMemphis wrote: Tue Oct 26, 2021 6:39 pm In many of the cases, those companies were well on the road to bankruptcy and their last resort was venture capital. In others, it was a startup that couldn’t get capital. There are many businesses that can’t walk into the local bank and borrow money. If they had options for cheaper money, they would take it.

So they end up with a venture capital firm. A firm that makes high risk investments. They anticipate high returns in exchange. In those situations, the venture capitalist takes a preferred secure creditor position. If you borrow such money and are successful then you win, if you are not successful then you lose. The venture capital guy, like any other creditor is looking after his investment and his return. It is no different than a debtor in possession loan in bankruptcy. It’s the same position the government was in during the GM bankruptcy.

The folks who enter into these deals aren’t stupid. They understand the risks. Other creditor who continue to deal with these companies also understand the risks. If you are in business and you loan money or otherwise extend credit, you should understand the risk or go work for someone else.

I have been thru similar transactions myself. Most (not all) businesses who go for high risk money can’t borrow anywhere else. If they could they would. If they don’t get the money, they just end up in bankruptcy anyway. A certain number of the folks who go to venture capital do make it. Others don’t. Not everybody wins in business.

Edited to add: I never commented on J&J as either good or bad.
gounion
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Re: Corporations and bankruptcy

Post by gounion »

Bludogdem wrote: Tue Oct 26, 2021 6:40 pm There are 35,000 lawsuits. Some they win & some they loose. J&J has won the last 5. However, they aren’t particularly interested in that many lawsuits. Here’s the basics of the new subsidiary.

"We are taking these actions to bring certainty to all parties involved in the cosmetic talc cases," said Michael Ullmann, Executive Vice President, General Counsel of Johnson & Johnson. "While we continue to stand firmly behind the safety of our cosmetic talc products, we believe resolving this matter as quickly and efficiently as possible is in the best interests of the Company and all stakeholders."

To demonstrate its commitment to resolving the cosmetic talc cases and remove any financial objections to the process,Johnson & Johnson has agreed to provide funding to LTL for the payment of amounts the Bankruptcy Court determines are owed by LTL and will also establish a $2 billion trust in furtherance of this purpose. In addition, LTL has been allocated certain royalty revenue streams with a present value of over $350 million to further contribute to potential costs.

John Kim, Chief Legal Officer of LTL, said, "With the financial backing of Johnson & Johnson, coupled with a dedicated trust and significant financial resources supporting LTL, we are confident all parties will be treated equitably during this process."

https://www.prnewswire.com/news-release ... 00916.html

A commitment to fund what the courts decide.
Oh, yeah, and you can always believe what a corporation says, right?

It's all about the bankruptcy!
JoeMemphis

Re: Corporations and bankruptcy

Post by JoeMemphis »

gounion wrote: Tue Oct 26, 2021 6:41 pm Yet most of these firms win even when they lose. Mitt would make millions off of companies he put through bankruptcy.

He rigs the game.

I note you didn't comment on the main part of my OP, the company you say is a great company, Johnson and Johnson.
I don’t recall saying J&J was either good or bad. So why should I comment on something I never claimed.
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Number6
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Re: Corporations and bankruptcy

Post by Number6 »

No doubt the CEO and top managers of J & J will receive very large bonuses this year.
When you vote left, you vote right.
gounion
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Re: Corporations and bankruptcy

Post by gounion »

JoeMemphis wrote: Tue Oct 26, 2021 6:43 pm I don’t recall saying J&J was either good or bad. So why should I comment on something I never claimed.
That's not true, Joe. I asked what Phara Companies you said weren't "bad actors" in the business, and you said Moderna, Phizer and Johnson and Johnson.
JoeMemphis

Re: Corporations and bankruptcy

Post by JoeMemphis »

gounion wrote: Tue Oct 26, 2021 6:45 pm That's not true, Joe. I asked what Phara Companies you said weren't "bad actors" in the business, and you said Moderna, Phizer and Johnson and Johnson.
I did say that I did not believe any of the Pharma companies that produced the vaccine were bad actors. I didn’t mention any of them by name. That being said, I didn’t say any of them were great. Not being a bad actor doesn’t make you great. It makes you an average corporate citizen. Nothing wrong with that.

So if anything those companies are okay in my book. Not perfect. Not great. Just normal.
gounion
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Re: Corporations and bankruptcy

Post by gounion »

JoeMemphis wrote: Tue Oct 26, 2021 6:49 pm I did say that I did not believe any of the Pharma companies that produced the vaccine were bad actors. I didn’t mention any of them by name. That being said, I didn’t say any of them were great. Not being a bad actor doesn’t make you great. It makes you an average corporate citizen. Nothing wrong with that.

So if anything those companies are okay in my book. Not perfect. Not great. Just normal.
This is what’s know in the biz as “pissing backwards”. J&J was responsible for tens of thousands of deaths in their part of the opioid mess.

Is killing tens of thousands what you consider a “good corporate citizen”???
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