Friday , December 3 2021

J&J puts talc responsibilities in bankruptcy



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October 14 (Reuters) – Johnson & Johnson (JNJ.N) on Thursday filed a bankruptcy tens of thousands of lawsuits alleging its Baby Powder and other talc-based products caused the cancer, and unleashed potential responsibilities in a newly created subsidiary.

J&J filed the talc claims in an entity called LTL Management LLC, which filed for bankruptcy protection Thursday in North Carolina, according to the company and court records. J&J and its affiliates were not part of the bankruptcy filing.

Tens of thousands of players have alleged J & J’s Baby Powder and other talc products containing asbestos and caused cancer, which the company denies. Actors include women suffering from ovarian cancer and others who are battling mesothelioma.

J&J executed Thursday’s corporate change through a contentious legal maneuver known as a two-stage Texas bankruptcy, a strategy used by other companies facing asbestos litigation.

In that process, a J&J business split in two through the so-called divisional merger under Texas law. That transaction created LTL, the new entity equipped with J&J’s talk bonds, according to court papers filed Thursday.

J&J, with a market value in excess of $ 400 billion, said talc cases would be stopped while LTL navigates bankruptcy proceedings.

The company’s costs of defending nearly 40,000 cases came in at $ 1 billion, according to bankruptcy court filings Thursday. The solutions and verdicts cost J&J about $ 3.5 billion more.

“We are taking these actions to bring certainty to all parties involved in cosmetics cases,” J&J Attorney General Michael Ullmann said in a statement.

“While we continue to stand firm behind the safety of our cosmetics, we believe that resolving this issue as quickly and efficiently as possible is in the best interests of (the company) and the parties. all interested, “Ullmann added.

Plaintiffs’ attorneys ruled on filing for bankruptcy. The “gimmick of J & J’s bankruptcy is as disgusting as it is brazen” and “unintentional abuse of the legal system,” said Linda Lipsen, chief executive of the American Justice Association, a group of trial lawyers , in a statement.

J&J said it would fund LTL’s legal costs for talc cases in an amount determined later by a bankruptcy judge, with an initial advance of $ 2 billion. J&J said LTL also received certain royalty revenue streams with a present value of more than $ 350 million to contribute to potential legal costs.

HIGH STACK LITIGATION

Reuters reported for the first time in July that J&J was exploring the unloading of its talc responsibilities and putting them into bankruptcy.

Thursday’s move moved high-interest J & J talc security litigation from courtrooms across the United States to a single legal proceeding before a potentially bankrupt federal bankruptcy judge. solution among the blue-chip company and players.

During previous settlement discussions, a J&J attorney told plaintiffs’ attorneys that the company could pursue the bankruptcy plan, which could result in lower fees for non-pre-settlement cases, previously reported. Reuters.

In the weeks leading up to Thursday’s bankruptcy filing, lawyers representing women with cancer claims called on multiple judges to ban J&J from performing such a maneuver, but only to be denied.

The company claimed in statements and in court proceedings over the summer that it had not decided whether to pursue the maneuver.

A 2018 Reuters investigation found that J&J had known for decades that asbestos, a known carcinogen, lay in its baby powder and other talc cosmetics. The company stopped selling Baby Powder in the United States and Canada in May 2020, in part because of what it called “misinformation” and “baseless allegations” about the talc-based product.

J&J claims that its consumer products are safe and confirmed through thousands of asbestos-free tests.

In bankruptcy court papers, lawyers for J&J’s re-created subsidiary said the filing of Chapter 11 was “required by a relentless attack from the plaintiff’s trial bar, based on the the false allegations that talc products … contain asbestos and cause cancer. “

In June, the U.S. Supreme Court refused to hear J & J’s appeal of a Missouri court ruling that resulted in $ 2 billion in damages awarded to women who alleged that the The company’s talc has caused cancer of their ovaries.

J&J wins in other recent talc cases.

Reporting by Mike Spector in New York and Dan Levine in San Francisco; Additional reporting by Amruta Khandekar and Nate Raymond in Boston; Editing by Peter Cooney and Cynthia Osterman

Our Standards: The Principles of Trust of Thomson Reuters.

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