Talc Committee Asks Court to Reject Johnson & Johnson’s Second Bankruptcy Filing

Talc Committee Asks Court to Reject Johnson & Johnson’s Second Bankruptcy Filing

If you’ve been following the news, you’ve probably heard about the ongoing legal battle between Johnson & Johnson and talcum powder plaintiffs. Nearly 38,000 individuals have filed talcum powder lawsuits. These plaintiffs allege that using J&J’s talc products, including baby powder, caused them to develop ovarian cancer. Recently, J&J initiated a second bankruptcy filing for its subsidiary, LTL Management. However, the Official Committee of Talc Claimants has urged the court to reject this second Johnson & Johnson bankruptcy bid. The committee argues that J&J is abusing the bankruptcy process.

Johnson & Johnson’s Latest Bankruptcy

Johnson & Johnson originally rolled out a controversial bankruptcy plan in October 2021. This legal maneuver, named the “Texas Two-Step,” saw the company transfer its talcum powder liabilities to a newly created subsidiary, LTL Management. After this move, LTL quickly filed for bankruptcy, freezing all talcum powder claims.

The first Johnson & Johnson bankruptcy tactic sparked outrage among talc plaintiffs as the company only offered $2 billion to settle cases. In its second bankruptcy filing on April 4, J&J proposed a significantly larger talcum powder settlement of $8.9 billion. However, many remain unconvinced regarding the company’s supposedly meaningful attempt to “fairly” compensate victims. Plaintiffs and their attorneys consider this settlement insufficient, pointing out that this sum would not be enough to cover medical expenses, let alone pain and suffering.

The Official Committee of Talc Claimants Rallies for the Dismissal of New Johnson & Johnson Bankruptcy

On April 24, the Official Committee of Talc Claimants filed to dismiss Johnson & Johnson’s second bankruptcy. The committee noted that LTL Management is not in financial distress. Therefore, it should not be allowed to continue in bankruptcy court. According to the filing, LTL has attempted to fabricate financial distress by fraudulently abandoning assets.

The committee contends that LTL Management still has the necessary resources and funds to resolve talc claims, just as it did when it initially filed for bankruptcy.

J&J Continues to Defend the Bankruptcy Attempt 

The company’s legal team says it is only fair for plaintiffs to vote on Johnson & Johnson’s bankruptcy filing. Johnson & Johnson has cited positive support from plaintiffs and several law firms. J&J claims that 60,000 talc plaintiffs approve of the new bankruptcy plan. But the talc committee states this number is misleading as most of these cases are unfiled or involve unproven claims outside of ovarian cancer. If it were to be put to a vote, J&J would need 75% approval from the plaintiffs to pass its bankruptcy settlement.

The talc committee maintains that J&J had the opportunity to settle with claimants willing to enter voluntary settlements. Instead, attorneys accuse J&J of trying to force claimants to submit to the terms offered by the company.

“The claimants have waited long enough. Hundreds died during the Debtor’s first bankruptcy without receiving fair compensation or their day in court,” the talc committee said in its filing. “And, because of LTL’s renewed abuse, that tragedy will continue. LTL’s fraudulent conduct cannot be rewarded with another 18 months in bankruptcy while talc victims continue to suffer and die.”