‘Good Faith’ Bankruptcy Filings Get Fresh Look Ahead of J&J Move

As Johnson & Johnson readies its third attempt to resolve talc-related cancer litigation through bankruptcy, courts remain divided on how to determine whether a corporation’s Chapter 11 filing is made in “good faith.”

There is no standardized method of evaluating good faith filings in the US Bankruptcy Code, leaving courts to determine for themselves how to address the issue.

When the US Court of Appeals for the Third Circuit last month affirmed a bankruptcy court’s dismissal of a J&J unit’s second Chapter 11, it said the case wasn’t filed in good faith because the company wasn’t in financial distress. The ...