In re LTL Management, LLC

Johnson & Johnson Consumer, Inc. (Old Consumer) was a subsidiary of Johnson & Johnson, Inc. (J&J). J&J was a Delaware corporation with New Jersey headquarters. Old Consumer and J&J faced more than 38,000 claims that certain talc products were carcinogens, most of which were pending in federal multidistrict litigation (MDL) in New Jersey for the past five years. In addition, several insurers sued Old Consumer and J&J in New Jersey state court regarding their policy obligations, and two talc companies filed adversary proceedings against Old Consumer and J&J in Delaware bankruptcy court. To resolve the talc-related claims, Old Consumer was dissolved and replaced by LTL Management, LLC (LTL) (debtor) and another entity. LTL was formed as a Texas limited-liability company (LLC) and then converted to a North Carolina LLC. LTL operated from New Jersey and had a New Jersey mailing address, and all LTL’s employees were seconded from another New Jersey-based J&J subsidiary that also provided LTL with administrative services. LTL conducted no North Carolina business. LTL received Old Consumer’s talc-related liabilities plus certain assets, including Old Consumer’s rights under a funding agreement with a newly formed North Carolina LLC. Two days after forming, LTL filed a Chapter 11 petition in North Carolina. The creation of a Texas LLC and then conversion to a North Carolina LLC mirrored tactics used in four other mass-tort cases. The bankruptcy administrator moved to transfer LTL’s case to New Jersey. The Official Committee of Talc Claimants (committee) and certain other parties supported transfer to New Jersey. LTL opposed transfer.