On January 20, 2023, the Philadelphia Court of Appeals denied J&J’s request to place its subsidiary, LTL Management, under Chapter 11 bankruptcy protection.

The company wanted to avoid the lawsuits and class actions surrounding the presence of asbestos in talcum powder. This carcinogen has caused many cancers and deaths over the years.

In connection with this case, Professor Jacquet wanted to examine the Merton model and its application to the anticipated loss of value of J&J.

He also reviews the concept of options and their application.