Attempts Underway to Sway Public Perception of Bankruptcy Process
Association says plaintiffs’ lawyers attempting to undermine bankruptcy process
The Senate Judiciary Committee will hold a hearing next week on the bankruptcy process. This hearing, which will focus on the treatment of litigation in these proceedings, is the second of its kind before the Congress in just a few months.
Statement from American Tort Reform Association (ATRA) President Tiger Joyce:
“There can be no doubt that the high-profile cases involving Purdue Pharma, a Johnson & Johnson subsidiary, and others have created a hue and cry that the bankruptcy process is unfair and that reforms backed by plaintiffs’ lawyers are needed to improve the system.
Why would the plaintiffs’ bar want to “reform” the bankruptcy system? The simple fact is that it is an effective way to work out a plan, under the supervision of a bankruptcy judge, that is fair to all involved. An overwhelming percentage of creditors must vote to approve it. This generally includes a special fund that is set up to pay plaintiffs equitably within the bankruptcy process as well as those in related litigation.
Plaintiffs’ lawyers generally object to bankruptcy because it impacts their fees, which can be one-third or more of a settlement or judgement. But for the actual plaintiffs, there is no “race to the courthouse” and all claimants are treated equitably and without the delay and additional expense of full-blown litigation.
Recent allegations that plaintiffs’ lawyers in the Johnson & Johnson case have improperly leaked confidential documents shortly before a key hearing in that matter should be thoroughly and promptly investigated. Media reports on the matter, however, plainly support the suggestion that this is an effort to “try the case in the media” and undermine the bankruptcy process.
The American Tort Reform Association believes that fair and prompt resolution of all legal claims must be the priority for the courts and the Congress. Regarding bankruptcy and this hearing, it would serve the public interest far better if Congress were to address the underlying problems that lead to bankruptcy, notably mass tort litigation abuses and the multidistrict litigation process. Doing so would serve the national interest rather than the profit motives of plaintiffs’ lawyers.”
ATRA’s Tiger Joyce also penned an op-ed in October 2021, when Congress held its first hearing on the bankruptcy process, detailing the need for Congress to prioritize national interests over the profit motives of plaintiffs’ lawyers and address the real issues driving the bankruptcy process.