Enter: J& js Ltl Management Llc
In October 2021, Johnson & Johnson executed the bankruptcy strategy to deal with the talc product liability. The company established a company named LTL Management LLC . Then, J& J swept the talc product litigation liability to the new company. LTL then filed for bankruptcy in North Carolina. The proceeding was later moved to New Jersey where J& J is headquartered.
Next came the financial contribution. J& J announced plans to give LTL $2 billion dollars for a trust. The trust would compensate all 38,000 current talc powder lawsuit plaintiffs as well as all future claimants. Before the bankruptcy filing, J& J was on the hook for $3.5 billion in talc powder lawsuit verdicts and settlements, including the $2 billion St. Louis award. J& J has said in court filings and in public statements that the subsidiary, LTL Management LLC, could also potentially tap a $350 million royalty revenue stream if needed.
LTL lawyers have stated that the bankruptcy filing was a prudent and necessary alternative for equitably and permanently resolving all the talc litigation. The company said its aim is for the reorganization plan to create a reasonable framework to address the unprecedented level of claims. Others view this maneuver as another example of how wealthy companies or organizations are avoiding the burdens of bankruptcy and shunning responsibility for the harm alleged against them in lawsuits.
Challenges To The J& j
While J& J is by far the largest company to use the TexasTwo-Step strategy, it is not the first. Insofar as the author hasbeen able to determine, J& J is the fourth company to use aTexas divisive merger before a bankruptcy filing.1 None of the otherTexas Two-Step cases have yet resulted in a confirmed plan ofreorganization. Nevertheless, these other cases suggest the newlyfiled case will face at least three major issues.
- Issue No. 1: Dismissal for badfaith.
- Issue No. 2: Venue.
However, it is far from clear that the Debtor LLC’s casewill remain in North Carolina. The Bankrutpcy Administrator has already filed amotion to transfer venue to the District of New Jersey. And onOctober 26, the Bankruptcy Court sua sponte entered an order toshow cause why the case should not be transferred. If the case istransferred to the District of New Jersey, the standard for a badfaith dismissal will be governed by the more creditor-friendlystandard of the Third Circuit. See In re Rent-A-Wreck ofAmerica, Inc. 596 B.R. 122 .
- Issue No. 3: Fraudulent transfer.
However, the transactions could still be challenged underSection 548 of the Bankrutpcy Code The definition of”transfer” in Section 101 of the Bankrutpcy Code isextraordinary broad .So the quirky provision in the Texas corporation law is notnecessarily the end of the story. The talc claimants will surelyargue that the October 12 restructuring can be reversed usingfederal fraudulent transfer law.
Summary
Footnote
Johnson & Johnsons Bad Faith Bankruptcy Attempts To Circumvent Jury Trial In Talc Cases
Lawyers connected to the Johnson & Johnson talcum-based baby powder lawsuits are calling the companys filing for Chapter 11 bankruptcy a masquerade, according to Law360. Attorneys are criticizing J& J for its transparent attempt to shield itself from liability claims. The move has several potential consequences for plaintiffs in these lawsuits, including a delay in litigation.
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Talcum Baby Powder Attorneys For Ovarian Cancer Lawsuits
This page is about the class action talcum powder lawsuit. Our attorneys provide the latest news and updates in the talcum powder litigation.
Our talc powder lawyers also discuss the expected settlement amounts victims can expect for compensation and when these lawsuits should resolve.
If you have a baby powder lawsuit to file, don’t delay. You may risk missing out on a settlement payout or jury verdict. Call our attorneys today at 800-553-8082 or fill out his quick and free case evaluation form.
Talcum Powder and Ovarian Cancer
Talc is mined from the ground like copper or gold, mostly in China. Baby powder is 99% talc. Shower to Shower is about 50% talc.
Approximately 24,000 women get ovarian cancer every year in the United States. Sadly, 14,000 women die a year of cancer.
As women apply talcum powder products around their genital area, specks of talcum can travel into the ovaries from the fallopian tubes. This is called transmigration These dangerous talc particles can remain lodged in a woman’s ovaries for years.
It is alleged that talcum remains trapped in a woman’s ovaries and leads to the growth of ovarian cancer cells. More troubling is the evidence that suggests that Johnson & Johnson was aware of peer-reviewed medical journal studies dating back 25 years ago that concluded that 10% of all ovarian cancer diagnoses per year were related to genital talc.
- The latest updates on the science of talcum powder lawsuits
Talcum Powder LawsuitsTALC Verdicts
J& j Business Argues Bankruptcy Is Only Option In Talc Lawsuits
A subsidiary of pharmaceutical company Johnson & Johnson, LTL Management, said in court documents that bankruptcy is the only option to settle the thousands of lawsuits lodged against J& J’s talc-based baby powder, The Wall Street Journal reported Aug. 16.
J& J created LTL Management in 2021 to handle the lawsuits, which hover at about 40,000, that allege its talc-based baby powder posed a cancer risk but didn’t inform customers of it. LTL’s strategy is to bankrupt itself under Chapter 11, which would then protect J& J at large, but the case’s Texas judges are expected to dissect this plan, according to the Journal.
Chapter 11 is a bankruptcy code that lets debtors who can’t pay off debts reorganize its business and debt structure, according to Cornell Law School’s Legal Information Institute.
Without LTL acting as a shield, the business said legal costs would surpass $1 billion, which would stack on top of the billions it already shelled out in other talc lawsuits, according to the Journal. One of its biggest payments happened in 2020 when a different appellate court ordered the pharmaceutical company to award more than $2 billion to women with ovarian cancer.
The Texas appellate court decision on whether to allow the subsidiary to use Chapter 11 could act as a precedent for future similar cases between drug companies and consumers.
Editor’s note: The headline was revised 12:00 p.m. CT to specify LTL Management, not J& J, is planning on bankruptcy.
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The Curious Matter Of The Disappearing Talc Cases
Remember the frustration, the anger even, the last time that you lost a dollar in a vending machine the clunk of coins followed by silence and suspended disbelief. Did you thump the machine, or even shake it in the hopes that something would break free? Remember that feeling, and then multiply it 4.7 billion times. That is the amount of one baby powder verdict rendered against Johnson & Johnson involving only a few plaintiffs. Other verdicts against Johnson & Johnson in the last three years have ranged from $0 to $417 million.
Such numbers promote aggressive advocacy. Plaintiffs attorneys nationwide are pouring advertising dollars into plaintiff-friendly jurisdictions which both generate plaintiffs and pre-prejudice juries. Then, three weeks ago, Johnson & Johnson sought to halt the litigation. With a single swoop of its mighty pen, Johnson & Johnson removed over 2,400 pending talc cases to various federal courts across the United States for transfer and consolidation of venue in the U.S. Bankruptcy Court for the District of Delaware.
Cancer Victims Urge Court To End J& J Bankruptcy Roadblock To Lawsuits
The Johnson & Johnson logo is displayed on a screen on the floor of the New York Stock Exchange in New York, U.S., May 29, 2019. REUTERS/Brendan McDermid/File Photo/File Photo
They asked a panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals to dismiss the bankruptcy of J& Jâs subsidiary LTL Management, saying that LTL is a âconcoctedâ corporation set up solely to stop them from getting their day in court.
J& J , which maintains its talc products are safe, spun off LTL in October, assigned its talc liabilities to it and placed the newly created subsidiary into bankruptcy days later.
That restructuring strategy, known as the âTexas two-step,â paused about 38,000 lawsuits J& J was facing alleging that its baby powder and other talc-based products contain asbestos and caused mesothelioma and ovarian cancer.
Critics, including lawmakers and legal experts, say J& Jâs bankruptcy maneuver could provide a blueprint for other big companies to avoid juries in mass tort lawsuits.
Circuit Judge Julio Fuentes at Mondayâs arguments asked the cancer victimsâ attorney Jeffrey Lamken whether the bankruptcy court could provide a more efficient resolution of the claims than trying cases one at a time in other courts.
Lamken said the court should not make a general ruling about whether bankruptcy is âbetterâ because its protections should be reserved for companies that are in financial distress and need to reorganize.
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The Missouri Talcum Powder Case
Inghan, et al. v. Johnson & Johnson, et al., was one of the earliest talcum powder lawsuits. It was filed in the Circuit Court for the City of St. Louis by a group of 22 women who alleged that they developed ovarian cancer from prolonged use of J& talcum powder products. The 2 specific J& J talcum powder products named in the suit were Johnsons Baby Powder and Shower to Shower.
The allegations against J& J in Inghan were similar to the claims that would eventually be repeated in the thousands of talcum powder lawsuits that would soon follow. The plaintiffs alleged that J& J knew for decades that its talc products contained asbestos fibers and other dangerous carcinogens but persisted in producing and marketing them despite the health hazards they posed.
The Inghan Complaint accused J& J of making a deliberate effort to conceal these health hazards from government regulators and public health officials, the scientific community, and the public.
The Inghan plaintiffs claimed that J& J was subject to jurisdiction in Missouri based on long-term contractual relationships with a Missouri company called Pharma Tech Industries. Under this contract, J& J talc products were manufactured, packaged, and supplied at Pharma Tech plants in St. Louis.
J& J challenged this jurisdictional claim in an unsuccessful motion to dismiss. J& J also attempted to sever the joined claims of the 22 plaintiffs because they were not all sufficiently related. This motion was also denied.
J& j Puts Talc Liabilities Into Bankruptcy
-Johnson & Johnson on Thursday put into bankruptcy tens of thousands of legal claims alleging its Baby Powder and other talc-based products caused cancer, offloading the potential liabilities into a newly created subsidiary.
J& J put the talc claims into an entity called LTL Management LLC, which filed for bankruptcy protection on 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 plaintiffs have alleged J& Js Baby Powder and other talc products contained asbestos and caused cancer, which the company denies. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.
J& J executed Thursdays corporate reshuffling through a contentious legal maneuver known as a Texas two-step bankruptcy, a strategy other companies facing asbestos litigation have used.
In that process, a J& J business split in two through a so-called divisional merger under Texas law. That transaction created LTL, the new entity saddled with J& Js talc liabilities, according to court papers filed Thursday.
J& J, with a market value exceeding $400 billion, said the talc cases would be halted while LTL navigates bankruptcy proceedings.
The companys costs defending nearly 40,000 cases have approached $1 billion, according to bankruptcy-court filings Thursday. Settlements and verdicts have cost J& J about $3.5 billion more.
HIGH-STAKES LITIGATION
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Trial Results In $4 Billion Verdict Against Johnson & Johnson
After J& J lost all of its preliminary motions, the case went through 18 months of pre-trial discovery in which thousands of pages of documents were produced. Eventually, in May 2018, the case went to trial in St. Louis. After hearing testimony from over 30 witnesses over 6 weeks, the jury returned a verdict finding J& J liable on all claims. The jury awarded $550 million in compensatory damages and an eye-popping $4.14 billion in punitive damages.
The size of the verdict was stunning. Before this case, there had been a handful of other talcum powder lawsuits that went to trial. The verdicts in these earlier cases were dwarfed by the $4.6 billion awarded in Ingham.
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J& j Cosmetic Talc Lawsuits Halted $2bn Trust Created As Subsidiary Takes Liabilities Into Bankruptcy
Johnson & Johnsons newly created subsidiary LTL Management LLC will take all cosmetic talc injury claims against the Johnsons Baby Powder manufacturer into bankruptcy proceedings. J& J says the move is designed to ensure equitable resolution for all parties, while plaintiffs attorneys have a decidedly different view on the matter.
How Does Johnson & Johnsons Bankruptcy Affect Talcum Powder Lawsuit Cases
Johnson & Johnsons bankruptcy move could mean several things for those bringing liability claims against the company:
LTL Could Now Be Liable for Talcum Powder Suits
LTL inherited liability during the divisional merger processand LTL has only $2 billion in trust to pay out potential liability claims, per Johnson & Johnson. Plaintiffs are now bringing a case against a much smaller entity than the original defendant, Johnson & Johnson, which has over $25 billion in cash, per National Public Radio. In turn, this could mean that plaintiffs could be left with smaller settlement payouts.
Compensation Could Be Fulfilled Through LTLs Bankruptcy Process
Some call Johnson & Johnsons move a clear attempt to escape the jury trial system and instead pay out liability claims through bankruptcy proceedings. Again, this could allow Johnson & Johnson to settle these cases cheaply.
Lawsuit Proceedings Are Currently Paused
As of November 10, 2021, the federal judge overseeing the bankruptcy case granted a two-month pause on liability litigation as a result of J& Js Chapter 11 filing.
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Could Other Debt Alternatives Provide Relief
A legal process, filing for bankruptcy can help reduce the majority of your debts. It is regulated by the Bankruptcy and Insolvency Act. The first step is to contact your local MNP LTD Licensed Insolvency Trustee, who will discuss and explain all of your options based on the assessment of your debt situation. Many times, after hearing of other options available, people have realized declaring bankruptcy wasn’t their best choice.
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Us Judge Temporarily Blocks Two State Lawsuits Over J& j Talc Marketing
-A U.S. bankruptcy judge has blocked New Mexico and Mississippi from pursuing lawsuits accusing Johnson & Johnson of misleading consumers about the safety of its talc products, such as its baby powder, for now.
U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey on Tuesday said the litigation must be paused while an appellate court reviews whether J& J can use the bankruptcy of subsidiary LTL Management to resolve claims it is facing alleging that its talc products caused cancer. He said he would revisit allowing the states’ lawsuits to proceed at a hearing in December.
J& J, which maintains its talc products are safe, created and spun off LTL in October, assigned its talc liabilities to the unit and placed it in bankruptcy a few days later.
That restructuring strategy, known as the “Texas two-step,” paused about 38,000 individual lawsuits J& J was facing alleging that its baby powder and other talc-based products contain trace amounts of asbestos and caused mesothelioma and ovarian cancer.
“We disagree with Judge Kaplan’s ruling and remain committed to ensuring that those companies that have knowingly harmed consumers for decades do not hide behind bankruptcy laws,” New Mexico Attorney General Hector Balderas said in a statement.
The office Mississippi Attorney General Lynn Fitch and J& J did not respond to requests for comment.
Department Of Justice Challenging Bankruptcy Ruling
Attorneys for claimants have argued that the bankruptcy court ruling violates the constitutional right to due process and a jury trial. They also believe bankruptcy should be reserved for companies in financial distress.
J& J is using this bankruptcy as a tactic to force an agreement an attempt to remove the jury trial, said attorney Jonathan Ruckdeschel of Ruckdeschel Law Firm LLC, who was present at the hearing.
Personal injury attorneys across the country believe the bankruptcy filing was done in bad faith, denying those harmed from being fairly compensated.
J& J attorneys have previously said the $2 billion set aside by LTL Management for a trust was just a starting point, and the amount was negotiable. Katyl, representing J& J at the hearing, said the trust fund could be worth as much as $60 billion.
The U.S. Department of Justice also has challenged the bankruptcy maneuver of Johnson & Johnson. At the Sept. 26 hearing, an attorney from the DOJ said if approved by the U.S. Court of Appeals, it will lead to other nonbankrupt companies, and even wealthy individuals, using similar strategies to avoid liabilities.
If Johnson & Johnson can get away with this bankruptcy, whats to stop any other company in America from doing the same thing? attorney Sean Janda, an attorney with U.S. Trustee, a division of the Department of Justice that oversees bankruptcy cases.
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