OPINION: Intimate conversations (updated)

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Bankruptcy cases don’t often make headlines. Settlements are reached, companies pay fines, and everyone goes about their business. Other elements, including the massive toll these cases can take, are often overlooked or ignored completely.

But that’s not always the case.

To avoid future lawsuits, Johnson & Johnson created a subsidiary company in 2021 called LTL Management to shield itself from any litigation. LTL was to pay out billions to resolve the claims against it. However, Judge Michael Kaplan recently ruled in favor of the claimants, not Johnson & Johnson. This allows for more suits to be filed, and keeps the company on the hook for any more compensation claims.

Genova Burns’ Dan Stolz was a key member fighting for the claimants at Johnson & Johnson. Working along with Genova Burns lawyers Gregory Kinoian and Donald Clark, these three acted as the local counsel for the talc claimants involved in the case. An expert in the field with over 40 years of experience, Stolz recalled the case as being indicative of “the extraordinary universe” of bankruptcy.

“If you want to know how arrogant these people are, LTL stands for Legacy Talc Litigation,” Stolz said of the case. “They weren’t subtle about it.” LTL was set up to take on the entire liability of Johnson & Johnson’s talc products, and the resulting lawsuits (Stolz estimated that there were over 40,000) that followed.

Stolz went into detail regarding the length of this case. Originally, Johnson & Johnson converted LTL Management into a North Carolina LLC before filing for Chapter 11 Bankruptcy in that state. This is a common maneuver in bankruptcy proceedings, often known as “the Texas Two Step.” To add to Stolz’s claims that Johnson & Johnson were acting in less than subtle means, LTL existed in North Carolina for only two days before filing for bankruptcy, suggesting this move was done solely for the purpose of avoiding full responsibility and filing for bankruptcy.

To make matters worse, according to court documents, LTL has no operational presence at all. All its assets were created for the sole purpose of declaring bankruptcy, and for Johnson & Johnson to avoid any/all responsibility.

“The judge in North Carolina essentially said, why is this even case here?” Stolz said. “The case should be held in New Jersey, where the company (Johnson & Johnson) is located. They transferred the case to New Jersey, which Johnson & Johnson wasn’t expecting.”

Ultimately, Judge Kaplan ruled against both Johnson & Johnson as well as their (hastily formed) subsidiary LTL Management. It is believed that LTL’s continued filing is solely for the purpose of avoiding paying out these talc claimants. These suits are being filed as a means for Johnson & Johnson to avoid a jury trial, which would likely see the company face consequences for its talc products causing various maladies to their former employees.

Stolz was a vital member of the legal team fighting for claimants against the corporate giant.

Many cases favor corporations, but this time is much different. The judge’s ruling allows for many other former and current employees of Johnson & Johnson to file their own suits. These claimants won’t be simply paid out: They are well on their way to seeing justice done.

Stolz says this case has a huge impact and sends a clear message to huge corporations.

“This serves as a warning shot for corporate America,” he said. “It discourages companies like Johnson & Johnson from using their financial clout in order to have cases go their way.”

For more information on the talc claimant’s case, please visit Official Committee of TALC Claimants (ltltalccommittee.org). The site provides a comprehensive timeline of events regarding this case.

Kevin Hall is a writer and editor from New Jersey. He has worked for Genova Burns LLC for several months, highlighting the firm’s partners, various project wins and accomplishments. He teaches Technical Writing at New Jersey Institute of Technology and contributes pieces to Sapphire Risk Advisory, Video Librarian and GQ Magazine.

Editor’s note: This story was updated at 1:48 p.m. ET on Oct. 9, 2023. A previous version incorrectly used the word “workers” instead of claimants; all references have been updated. Additionally, LTL does not stand for Limited Talc Liability, as previously indicated, but rather Legacy Talc Litigation.