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BankruptcyThe Bankruptcy StrategistFeatures

Mass Tort Cases Test Boundaries of Chapter 11 Bankruptcies

By Christopher F. Graham and Frank J. Perch III and Morgan A. Goldstein and Lina Maria Diaz
August 31, 2025

Courts continue to grapple with issues impacting the rights of debtors, creditors and insurers in Chapter 11 cases filed by companies facing mass tort liabilities. This article summarizes key takeaways from significant cases such as Red River Talc and Boy Scouts of America (BSA). We also review the fallout from last year’s Supreme Court rulings in Purdue Pharma, barring nonconsensual third-party releases in reorganization plans, and Truck Insurance v. Kaiser Gypsum, endorsing broad standing for insurers in bankruptcy proceedings.

J&J’s Third Attempt to Resolve Talc Liabilities In Chapter 11 Fails


Johnson & Johnson’s multi-year effort to settle its talc liabilities by placing a special-purpose entity into Chapter 11 ended on March 31, when the U.S. Bankruptcy Court for the Southern District of Texas dismissed the Chapter 11 case of Red River Talc, LLC, a subsidiary that J&J created using the Texas divisional merger statute (called the “Texas Two-Step”). See, In re Red River Talc, 2025 Bankr. LEXIS 863 (Bankr. S.D. Tex. Mar. 31, 2025).

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