Johnson & Johnson’s Talc Lawsuits on Hold During Bankruptcy Proceedings

Johnson & Johnson’s Talc Lawsuits on Hold During Bankruptcy Proceedings

Johnson & Johnson’s subsidiary, LTL Management, filed for Chapter 11 bankruptcy protection in 2021 to carry its talc-related liabilities. This move was a part of J&J’s second attempt to settle thousands of talc-related lawsuits. On Thursday, Judge Michael Kaplan temporarily halted approximately 40,000 of these lawsuits, which claim that J&J’s baby powder and other talc products caused cancer. The pause will remain until mid-June.

During the hearing in U.S. Bankruptcy Court in Trenton, New Jersey, Judge Kaplan stated that J&J has an “uphill battle” ahead. This pause gives J&J time to work on a permanent settlement with plaintiffs in the talc cases. The company recently proposed an $8.9 billion settlement for current and future talc-related claims, which it plans to bring to bankruptcy court in mid-May. Although J&J won’t have to go to trial over any other talc claims during the hold, new lawsuits can still be filed against the company.

J&J believes that claimants will overwhelmingly support the proposed settlement. More than 60,000 claimants have already committed to voting in favor of the plan. The company stated that Judge Kaplan’s decision is a “win for claimants” since it brings them “one step closer” to being able to vote on the proposed settlement.

J&J Continues to Deny Allegations

J&J has continued to deny the allegations that its talc products contain asbestos, which caused ovarian cancer in thousands of individuals. Chief Financial Officer Joseph Wolk said in an earnings call on Tuesday that it is “unfortunate” that J&J has to “put dollars towards quite frankly baseless scientific claims.” Some lawsuits link several deaths to J&J’s talc products. Amid the ongoing legal battles, J&J has proposed the $8.9 billion settlement for current and future talc-related claims.

Earlier, Judge Kaplan had ruled that J&J can use the bankruptcy system to resolve talc allegations, allowing the company to avoid fighting thousands of individual lawsuits. However, the U.S. Court of Appeals for the 3rd Circuit overturned that ruling in January, stating that neither LTL nor J&J had a legitimate need for bankruptcy protection since they were not in “financial distress.” Despite the setback, J&J remains committed to resolving the talc-related claims through the bankruptcy system.


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