> one pretty practical approach [to how to solve this problem] is bankruptcy. This, after all, is what bankruptcy is for: It is a system to make sure that creditors are all paid fairly out of the assets of a company, rather than paying some creditors a lot because they are early and others nothing because they are too late.
That's a legit argument in favor of bankruptcy of the entire company! There's no good justification for creating a shell company to control the damages on the main company (who did kill people).
Didn't you even skim the article? There's a short summary at the beginning:
> J&J is facing more than 38,000 lawsuits alleging that the company's talc products, including its Baby Powder, were contaminated by asbestos and caused cancers including ovarian cancer and mesothelioma
Right, but these judgements have yet to be levied. The problem they are solving with this maneuver is ensuring a common/fair result for the people suing, without the "unreasonable" step of declaring bankruptcy on the company as a whole without actual obligations.
As other comments have mentioned, Matt Levine has an excellent article describing the logic behind their actions.
That's a legit argument in favor of bankruptcy of the entire company! There's no good justification for creating a shell company to control the damages on the main company (who did kill people).