Talc claimants urge dismissal of J&J subsidiary’s bankruptcy petition

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A group of plaintiffs who have filed talc lawsuits against Johnson & Johnson is asking the court to dismiss a second bankruptcy bid by LTL Management, a subsidiary created by the New Brunswick health giant to handle the cases.

In an April 24 motion, the Official Committee of Talc Claimants urged the U.S. Bankruptcy Court for the District of New Jersey to toss the case, saying the bankruptcy filing was not brought in good faith because they believe neither LTL nor Johnson & Johnson is in financial distress.

The committee said, “LTL’s continued abuse of the bankruptcy system and new effort to force a resolution on claimants who do not want to settle on the terms offered by J&J is offensive and appalling.”

They went on to say the company’s attempt to “use bankruptcy to cram down its proposal on nonconsenting claimants” is “illegitimate and unlawful.”

In disclosing its decision to refile LTL for bankruptcy earlier this month, J&J proposed an $8.9 billion settlement over the next 25 years to resolve current and future talc claims.

In response to the latest bankruptcy petition, Judge Michael Kaplan in Trenton froze more than 38,000 lawsuits that allege Johnson & Johnson’s baby powder and other talc products caused cancer, to allow more time to reach a settlement.

As part of Kaplan’s April 20 order, proceedings will remain on hold until mid-June. While the judge halted any trials over new claims, he ruled that new lawsuits can be brought against LTL in the meantime.

A previous Chapter 11 petition was rejected earlier this year by the Third Circuit Court in Philadelphia, which ruled that neither J&J nor its subsidiary were in dire financial straits.

During its first bankruptcy bid, which began in October 2021 and kept lawsuits frozen for 18 months, J&J committed $2 billion to settle claims.

The committee said in a statement, “The claimants have waited long enough. Hundreds of talc victims have died during the debtor’s first fraudulent bankruptcy without receiving fair compensation or their day in court. And, because of LTL’s renewed abuse, that tragedy will continue – more victims will lose their battle with cancers caused by J&J’s deadly talc products. LTL’s fraudulent conduct cannot be rewarded with another 18 months in bankruptcy while talc victims continue to suffer and die.”

J&J – which has continued to maintain that its products are safe – says the new settlement proposal has support from more than 55,000 plaintiffs. In order for the bankruptcy court to approve the resolution and make it binding, the company needs about 75% of claimants to vote in favor of it.

In an April 24 statement, Erik Haas, J&J’s worldwide vice president of litigation, said, “The motion is nothing more than a desperate attempt to prevent the tens of thousands of claimants from deciding for themselves and vote on a resolution plan.”

“As demonstrated in the recent hearings, there is significant support for the plan, including from major plaintiffs’ law firms representing the vast majority of the claimants in this litigation, as well as lawyers who previously led the opposition to the first bankruptcy,” he said.

Haas went on to say, “Opposition to the plan is driven by firms who have a profit motive to remain in the tort system that is at odds with the interests of their clients. When presented with a clear and complete explanation and the opportunity to make an informed choice, we firmly believe the claimants will approve the plan.”