J&J offers US$8.9B payout over alleged talc powder asbestos contamination
05 Apr 2023 --- Johnson & Johnson’s (J&J) subsidiary LTL Management (LTL) yesterday re-filed for voluntary Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of New Jersey. The company is aiming to resolve all legal claims accusing J&J’s talc powder of containing traces of cancer-causing asbestos with a sum of US$8.9 billion.
This comes after a judge in the Third Circuit Court of Appeals, Philadelphia, “dismissed” LTL’s bid for the same protection in January after an onslaught of multi-billion dollar legal accusations against J&J’s baby powder.
However, with the re-filing, J&J is expecting to obtain approval of a reorganization plan aimed at resolving “all the current and future talc claims” against the company. As a result, J&J has agreed to present the billion-dollar sum, payable over 25 years.
This is an increase of US$6.9 billion over the US$2 billion previously committed in connection with LTL’s initial bankruptcy filing in October 2021, shares the company.
J&J has agreed to present the billion-dollar sum, payable over 25 years – an increase of US$6.9 billion.
In addition, LTL – a company set up to manage legal claims tied to J&J’s talc – has secured 60,000 claimants to support its terms and effort toward “global resolution.”
J&J has agreed to present the billion-dollar sum, payable over 25 years – an increase of US$6.9 billion.“Business as usual”
In the previous case, Judge Thomas Ambro underscored that only “a putative debtor in financial distress” is eligible for relief. However, since LTL did not meet the criteria, Ambro decided not to pass the Chapter 11 petition.
However, J&J fired back with a statement, disagreeing with the Bankruptcy Court’s judgment that LTL’s filing was not in “good faith.”
J&J maintains that LTL’s original filing and the re-filing is not an admission of wrongdoing, “nor an indication that the company has changed its longstanding position that its talcum powder products are safe.”
“Johnson & Johnson and its other affiliates did not file for bankruptcy protection and will continue to operate their businesses as usual,” states the company.
Emphasizing good faith
Erik Haas, worldwide VP of litigation at J&J, says: “The company continues to believe that these claims are specious and lack scientific merit. However, as the Bankruptcy Court recognized, resolving these cases in the tort system would take decades and impose significant costs on LTL and the system, with most claimants never receiving any compensation.”
“Resolving this matter through the proposed reorganization plan is both more equitable and more efficient, and allows claimants to be compensated in a timely manner.”
J&J maintains that it has won most cosmetic talc-related jury trials prosecuted to date.
Most claims against J&J allegate that cosmetic talc causes ovarian cancer and mesothelioma.
“Notwithstanding the lack of scientific validity to these claims, plaintiff trial lawyers continue to relentlessly advertise for talc claims, supported by millions of dollars of litigation financing, all in the hopes of a massive return on investment,” adds John Kim, chief legal officer at LTL.
“LTL’s goal has always been to resolve these claims quickly, efficiently and fairly for the claimants, both pending and future, and not incentivize abuse of the legal system. We filed the original action in good faith and, heeding the Third Circuit’s guidance, have filed this new case to effectuate that intent.”
Most claims against J&J allegate that cosmetic talc causes ovarian cancer and mesothelioma.
The company retorts that this position has been rejected by independent experts and governmental and regulatory bodies for decades – “more than 40 years of studies by medical experts around the world continue to support the safety of cosmetic talc. Nonetheless, resolving this matter as quickly and efficiently as possible is in the best interests of the company and all stakeholders,” states J&J.
Edited by Venya Patel
