Jones Day Bid to Represent Bankrupt J&J Talc Unit Under Fire

Jones Day LLP’s help creating Johnson & Johnson’s talc liability spinoff should disqualify the firm from serving as the unit’s lead bankruptcy counsel, the Justice Department and thousands of talc injury claimants said.

Jones Day “appears to be the architect” of J&J’s October corporate restructuring, the U.S. Trustee’s office—the DOJ’s bankruptcy watchdog—said in a court filing Wednesday.

The move, known colloquially as the Texas Two-Step, allowed the manufacturing giant to isolate its exposure to more than 35,000 baby powder injury lawsuits and address those claims in Chapter 11.

By assisting J&J through the divisional merger and bankruptcy filing, Jones Day ...