J&J effort to resolve talc lawsuits in bankruptcy fails a second time
By Dietrich Knauth
NEW YORK (Reuters) -A U.S. judge on Friday shot down Johnson & Johnson (NYSE:JNJ)'s second attempt to resolve tens of thousands of lawsuits over its talc products in bankruptcy, imperiling a proposed $8.9 billion settlement that would stop new lawsuits from being filed.
U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey, ruled that J&J company's second bankruptcy, like its first, must be dismissed because the company was not in «financial distress.»
J&J's first bankruptcy gambit began in 2021, when it offloaded its talc liabilities into a new company, LTL Management, and immediately placed that company into bankruptcy. LTL's first bankruptcy was dismissed in April after a U.S. appeals court ruled that it was not in sufficient financial distress to be eligible for bankruptcy protection.
LTL quickly filed for bankruptcy again, arguing that its second effort has won more support from plaintiffs for a comprehensive settlement of current and future lawsuits alleging that J&J's baby powder and other talc products sometimes contained asbestos and caused mesothelioma, ovarian cancer and other cancers. J&J has said its talc products are safe and do not contain asbestos.
Attorneys representing cancer victims, along with the U.S. Justice Department's bankruptcy watchdog, had called for LTL's second bankruptcy to be dismissed as an abuse of U.S. bankruptcy law. Cancer victims who oppose the bankruptcy settlement argued that the second bankruptcy recycles a failed legal strategy to keep their cases from being heard by juries.
J&J argued that the proposed bankruptcy settlement offers a fairer and faster resolution for cancer claimants than litigation in other courts. J&J compared recent trials to a
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