Dismissal of LTL Bankruptcy Signals Latest Failure by J&J to Evade Responsibility for Decades of Deceit in Talc-Asbestos Litigation

Lawyers for victims seek resumption of trials, meaningful efforts to resolve longstanding litigation on behalf of cancer victims

The dismissal of the second attempt by Johnson & Johnson’s LTL subsidiary to assert bankruptcy protection and limit corporate liability for manufacturing and marketing asbestos-laden talcum powder products should lead to the rescheduling of trials in federal and state civil courts, say lawyers representing thousands of ovarian cancer and mesothelioma victims.

“Today the court has finally, rightfully denied this latest attempt by one of the world’s largest and most financially successful companies to abuse the bankruptcy system and avoid responsibility for its dangerous product,” says Andy Birchfield, head of the Mass Torts Section at the Beasley Allen Law Firm. “J&J initially set aside $61.5 million in its first bogus bankruptcy. But J&J’s legal department proposed a settlement that offered only a fraction of that amount and sought the bankruptcy court’s assistance in cramming that bad deal down on cancer victims. Thankfully, with today’s order, that ploy is dead.”

In the ruling, Chief Judge Michael Kaplan of the U.S. Bankruptcy Court in New Jersey found LTL could not show sufficient financial distress to warrant bankruptcy protection, given the hundreds of billions in assets and annual financial revenue of parent company J&J.

“The evidentiary record fixed at trial does not establish sufficient ‘imminent’ or ‘immediate’ financial distress to satisfy the criteria enunciated by the Third Circuit,” Judge Kaplan writes. “Simply put, the Debtor does not meet the more exacting gateway requirement implemented by the Circuit with respect to ‘good faith’ which would allow LTL to take advantage of the tools available under the Bankruptcy Code to resolve its present and future talc liabilities.”

LTL had offered $8.9 billion to settle all current and future talc litigation and suggested that the proposal would have the overwhelming support of plaintiffs and their attorneys.

“Average costs for medical care, lost wages, lost jobs and pain and suffering can average more than $500,000 and up to more than a million dollars per victim.” says Michelle Parfitt, co-chair of the plaintiffs steering committee. “The plan would have paid a tiny fraction of the amount needed to fairly compensate victims of ovarian cancer and mesothelioma.”

“We believe that J&J should be willing to accept responsibility and, as the company likes to say, resolve these cases fairly and equitably,” says Leigh O’Dell, co-chair of the talc plaintiffs steering committee in the multidistrict litigation in New Jersey federal court. “This has gone on too long. It’s time for our clients to have their days in court and for J&J to stop its bullying tactics and end this nightmare for victims.”

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