U.S. Bankruptcy Judge Michael Kaplan denied Johnson & Johnson’s second bankruptcy attempt in a recent court decision. This decision offers hope to many mesothelioma and ovarian cancer victims seeking justice from Johnson & Johnson. The consumer giant is facing tens of thousands of negligence claims accusing its talc powder product of causing mesothelioma and ovarian cancer.
Sometime back, Johnson & Johnson formed its subsidiary, LTL Management, for the purpose of carrying its talc liabilities into Chapter 11 bankruptcy. When a company is facing mesothelioma or other asbestos-related lawsuits, the company can file for Chapter 11 bankruptcy. Once the bankruptcy filing is approved, the company is required to establish a trust fund and put aside money to compensate people harmed by asbestos. In 2021, LTL Management filed for Chapter 11 bankruptcy and offered $2 billion in settlement for victims and their families. An NJ bankruptcy court approved this first filing, but a higher court reversed the decision citing that the company filed for bankruptcy without any real financial distress, thus, lacked good faith.
Johnson & Johnson did not give up and, through its subsidiary, filed for bankruptcy for the second time. The company offered $8.9 billion in settlement in the second bankruptcy filing for the victims and their families. This is over four times the amount Johnson & Johnson had offered during the first bankruptcy filing. However, despite this and the fact that about 60,000 plaintiffs and some attorneys representing plaintiffs supported the proposed settlement, many more people argued against the move. According to those who do not support Johnson & Johnson’s attempt to declare bankruptcy, allowing Johnson & Johnson to declare bankruptcy would mean that victims and their families will be forced to agree to insufficient terms and will prevent those who may be diagnosed in the future from pursuing justice.
To the relief of many, Johnson & Johnson’s second bankruptcy filing was denied. Judge Michael Kaplan, who rejected Johnson & Johnson’s petition, noted that the consumer giant failed to show the unresolved litigation creates a level of financial distress that would warrant a bankruptcy approval. Again, J&J did not take this decision well and said it would file an appeal. Additionally, the company said it would vigorously defend itself against false lawsuits and lawsuits that lack scientific merit.
Johnson & Johnson continues to argue that their product did not cause the claimants’ illness. This is despite there being evidence that links talc exposure with asbestos-related diseases. J&J still maintains that its product is safe and does not cause cancer. The irony is that while Johnson & Johnson maintains that their product is safe, recently, the company discontinued its talc-based products.
The move by J&J to not give up on filing for bankruptcy has angered many attorneys representing the victims, and one attorney even said that it is time for the consumer giant to stop trying to convince the public that a company worth half-trillion dollars is bankrupt. Now all that victims can do is wait to see if J&J appeals the recent decision and, if it does, what happens.
Nationwide Mesothelioma Lawyers
If you or a loved one were diagnosed with mesothelioma, contact our office to speak to one of our experienced nationwide mesothelioma attorneys about your situation. Our office can help investigate your case and determine if compensation can be sought from negligent parties to help you and your family live a more comfortable life.