Expedited Appeal of J&J’s Controversial Bankruptcy Plan Granted

Legal News

The U.S. Bankruptcy Court judge that approved Johnson & Johnson’s plan to dump its talc liabilities into a subunit and declare bankruptcy has granted talc cancer plaintiffs an expedited appeal of his ruling in bankruptcy court. 

On Wednesday, Judge Michael Kaplan allowed the challenge of his February ruling that J&J’s creation of subunit LTL Management and that entity’s subsequent declaration of Chapter 11 bankruptcy was not an abuse of the U.S. bankruptcy code. 

Judge Kaplan ruled that in allowing J&J’s so-called “Texas Two-Step,” a more expedited resolution to talc litigation will ensue. Over 38,000 talc lawsuits remain unresolved. Talc plaintiffs claim that they developed either ovarian cancer or mesothelioma as a result of prolonged usage of J&J’s asbestos-contaminated talc products. 

Talc plaintiffs had sought the establishment of two committees to represent the plaintiffs during the bankruptcy appeal. One committee would represent plaintiffs with ovarian cancer claims and while the other committee would represent mesothelioma claims. However, Judge Kaplan rejected that plan, stating that one committee would be sufficient for both types of claims. 

J&J sought to have the appeal of LTL Management’s bankruptcy adjudicated in a regular U.S. District Court but Judge Kaplan rejected the idea, stating that doing so would delay the outcome of the case.

J&J faces talc litigation costs of $3.5 billion in the form of verdicts and settlements. The company is facing a $2.1 billion verdict from a 2018 case in Missouri, in which a jury found that J&J’s asbestos-tainted talc caused 22 women to develop ovarian cancer. An appeals court affirmed the verdict and said that the company disregarded the safety of consumers in its drive for profit, despite knowing its talc products caused ovarian cancer. It also found “significant reprehensibility” in the company’s conduct, Reuters reported. 

The Supreme Court of Missouri affirmed the appeals court decision and then in June 2021, the nation’s high court declined J&J’s request to overturn the decision.


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