Americas Podcast: Johnson & Johnson “Texas Two Step” and Yak Access Creditors Organize
Mon Sep 20, 2021 7:37 pm Distressed Debt  High Yield Bonds  Leveraged Finance

Featuring a discussion on Johnson & Johnson’s response to a group of talc plaintiffs’ motion for an injunction from a New Jersey state court preventing the company from pursuing a “Texas two-step” chapter 11 strategy to shed its talc liabilities, as well as the company Yak Access, whose creditors have began to organize, and Cornerstone Chemical, our Americas Core Credit podcast dives deep into the most prominent distressed debt, performing credit and high-yield news from the week. 

On Johnson & Johnson, the plaintiffs alleged that a Texas divisional merger that allocates all the companies talc liabilities to a spinoff without sufficient assets to meet those liabilities would be avoidable as a fraudulent transfer and therefore should be enjoined before it occurs. Johnson & Johnson argued that if this were true, the plaintiffs would have a sufficient remedy of law, an action to avoid the merger should the defendants ever actually transfer assets citing Judge Lori Silverstein’s August 26 decision denying Imerys talcs request for a similar injunction in its chapter 11 cases. 

Discussing Yak Access, an ad hoc group of first lien lenders organized with Akin Gump amid rising concerns about the company’s liquidity and business outlook after a disappointing second quarter according to sources. The company’s second lien lenders also reportedly organized with Ropes and Gray. Members of the ad hoc first lien lender group includes Seabam, KKR and Soundpoint.

Listen to the full episode below to hear our detailed discussion on Johnson & Johnson, Yak Access, Cornerstone Chemical and more.  

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