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Update:
- A bankruptcy judge in New Jersey chose to dismiss the Chapter 11 case of Johnson & Johnson’s talc unit last week.
- The judge ruled Johnson & Johnson’s second attempt at taking care of thousands of talc injury claims failed to meet standards necessary to qualify as financial distress.
- The 2nd Circuit came to the same decision in January when it dismissed an initial Chapter 11 filing by debtor LTL Management LLC.
- Johnson & Johnson created the debtor in October 2021, only two days before it initially filed for Chapter 11 protection in a North Carolina bankruptcy court.
- Johnson & Johnson faces tens of thousands of claims that it exposed consumers to talc products allegedly containing asbestos, which has been linked to ovarian cancer and mesothelioma, among other adverse health effects.
(Jan. 31, 2023)
A federal appeals court rejected an effort by Johnson & Johnson to file bankruptcy to get off the hook for multibillion dollar litigation over claims its talc products caused users to develop cancer.
The U.S. 3rd Circuit Court of Appeals made the decision to remove Johnson & Johnson’s bankruptcy filing — made by the company’s LTL Management unit in the wake of more than 38,000 legal claims against it, Reuters reports.
The complaints reportedly revolved around the manufacture and sale of Johnson & Johnson’s talc-based baby powder, with claimants arguing the talc in the products has been linked to cancer.
Johnson & Johnson says it plans to appeal the court’s decision, while shares of the company’s stock dipped around 3% on the New York Stock Exchange in midday trading Jan. 30, Reuters reports.
The pharmaceutical company, which has reportedly maintained that its talc-based products pose no harm to consumers, created LTL and assigned its talc liabilities to it prior to placing it in bankruptcy in 2021.
Johnson & Johnson bankruptcy filing would help it handle talc complaints, company says
Johnson & Johnson argues that filing for bankruptcy would allow the company to handle the thousands of talc-related claims more efficiently and fairly than if it were required to go on a case-by-case basis, Reuters reports.
The company also reportedly pledged to ensure LTL would be able to ultimately pay talc claimants, with Reuters reporting Johnson & Johnson promised to create a funding “backstop.”
The 3rd Circuit, in rejecting the bankruptcy attempt, reportedly ruled Johnson & Johnson only created the LTL unit to access the bankruptcy system.
In other Johnson & Johnson news, a consumer filed a class action lawsuit against the company last year, claiming Johnson & Johnson violated Illinois biometric privacy law with its Neutrogena Skin360 skincare program.
Did you or a loved one develop ovarian cancer or mesothelioma after using Johnson’s Baby Powder or Shower to Shower daily for at least four years? If so, you may be eligible to file a baby powder cancer lawsuit.
The Johnson & Johnson bankruptcy case is In re: LTL Management LLC, Case No. 22-2003, in the U.S. Court of Appeals for the 3rd Circuit.
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