A Johnson & Johnson (JNJ.N) subsidiary on Monday will urge a judge to allow it to use the bankruptcy process to resolve tens of thousands of claims that the company's baby powder and other talc-based products caused cancer.
More than 38,000 plaintiffs have alleged the company's talc products caused ovarian cancer and mesothelioma, a deadly cancer linked to asbestos exposure. J&J maintains that its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.
The company in October placed the talc claims into a newly-created entity called LTL Management LLC, which filed for bankruptcy protection in North Carolina.
J&J used a legal maneuver known as the "Texas two-step," which allows companies to split in two through a so-called "divisive merger," with one part of the company keeping valuable assets while the other is saddled with liabilities.
U.S. Bankruptcy Judge Michael Kaplan in New Jersey, who took over the LTL case in November when it was transferred from North Carolina, has scheduled a five-day trial to consider a bid by committees representing the plaintiffs to dismiss the bankruptcy case.
The plaintiffs argue that allowing the LTL bankruptcy, to proceed would unfairly cap the payout that could be available for people who have been harmed.
The bankruptcy proceeding “makes dying cancer victims, even those with a judgment, scratch, claw, and fight, potentially for years, to be compensated from funds that would have been available" before LTL was split off, the plaintiffs’ lawyers wrote in December court papers.
LTL countered in court filings that bankruptcy is a legal and appropriate response to an unpredictable and "potentially financially ruinous" wave of lawsuits.
J&J has proposed giving the subsidiary $2 billion to put into a trust to compensate the 38,000 current plaintiffs and future claimaints. The company has said in court filings and in public statements that LTL could also tap a stream of royalty revenue valued at more than $350 million at the time of the bankruptcy filing.
"There has been no attempt in this case to 'slough off' liability," LTL wrote in December court papers. The "goal of this case is to reach an equitable, efficient, and consensual resolution."
Before J&J split off LTL, it faced $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy-court records.
The talc lawsuits have been temporarily halted while J&J, which has a market value exceeding $446 billion, awaits the outcome of the LTL bankruptcy proceedings.
Kaplan has said he intends to decide whether or not to dismiss the bankruptcy case before the end of the month.
On February 4, Reuters reported that J&J secretly launched "Project Plato" last year to shift liability from about 38,000 pending talc lawsuits to a newly created subsidiary, which was then to be put into bankruptcy.
A 2018 Reuters investigation found that J&J knew for decades that trace amounts of asbestos lurked in its Johnson's baby powder and other cosmetic talc products.
The company stopped selling its baby powder in the United States and Canada in May 2020, in part due to what it called "misinformation" and "unfounded allegations" about the talc-based product.
Latest Stories
-
Let’s prioritize research quality in higher education institutions for industrial growth-Prof. Nathaniel Boso
2 hours -
Herman Suede is set to release ‘How Dare You’ on April 24
6 hours -
Heal KATH: Kuapa Kokoo, Association of Garages donate 120k to support project
6 hours -
KNUST signs MOU with Valco Trust Fund, Bekwai Municipal Hospital to build student hostel
6 hours -
The influence Ronaldo has on people, Cadman Yamoah will have same on the next generation – Coach Goodwin
7 hours -
Gender Advocate Emelia Naa Ayeley Aryee Wins prestigious Merck Foundation Awards
8 hours -
South Africa bursary scandal suspects granted bail
8 hours -
Ecobank successfully repays $500m Eurobond due April 18
8 hours -
Re: Doe Adjaho, Torgbui Samlafo IV, call for Unity among Paramountcies in Anlo
8 hours -
Extortion and kidnap – a deadly journey across Mexico into the US
8 hours -
Rihanna says fashion has helped her personal ‘rediscovery’ after having children
9 hours -
Development Bank Ghana targets GH¢1bn funding for commercial banks in 2024
9 hours -
Shatta Movement apologises to Ghana Society of the Physically Disabled after backlash
9 hours -
Sammy Gyamfi writes: Tema-Mpakadan Railway Project; A railway line to nowhere
10 hours -
Bright Simons: Is the World Bank saving or harming Ghana?
10 hours