A court determined that Johnson & Johnson cannot pressure thousands of cancer patients to withdraw their cases and accept a $8.9 billion settlement by pointing to a unit’s bankruptcy case.

Johnson & Johnson

The bankruptcy case of LTL Management

The bankruptcy case of LTL Management was rejected by federal courts for the second time in about six months. The Johnson & Johnson unit was established by Johnson & Johnson to put a halt to any health claims made in relation to baby powder and other goods manufactured with talc that was allegedly tainted with a dangerous chemical, both present and future.

The US bankruptcy In a written ruling on Friday, Judge Michael Kaplan stated that a stricter criterion for utilising bankruptcy had been established by an appeals court than the judge had taken into account when J&J originally declared LTL insolvent. As things are right now, witnessing smoke may not be sufficient to determine financial trouble; one must also saw flames,” wrote Kaplan.

Following the decision, J&J stock fell as much as 3.4% in after-market trade. The business promised to challenge Judge Kaplan’s decision.

Erik Haas, global vice president of litigation for J&J, stated in a statement, “As the Bankruptcy Court emphasised in its judgement, we will continue to cooperate with lawyers representing approximately 60,000 claimants to achieve a settlement of the talc claims. According to business lawyers, J&J might be facing up to 100,000 talc-related claims, many of which have not yet been formalised as legal actions. Some of the most successful product liability attorneys in the US filed lawsuits against the corporation in state and federal courts around the country, and following jury trials, they were awarded billions of dollars in damages.

Bully in the workplace

“It speaks well for the independence.” a half-trillion-dollar corporate bully like Johnson & Johnson cannot go to bankruptcy court to dodge jurors because of the fairness and integrity of our courts,” A talc victim’s advocate, Moshe Maimon, stated in an email on Friday. Many damage claims have lost at trial or may have to wait years before getting the chance to present their cases to a jury, but J&J has maintained that its bankruptcy approach is intended to properly and equitably compensate them. J&J has disputed responsibility in the cases and insisted that the safety of its talc-based products.

Johnson & Johnson

Johnson & Johnson’s bankruptcy case rejected as settlement tool for cancer lawsuits

Judge Kaplan had already permitted J&J to dismiss all present and future talc allegations made against it by using special bankruptcy procedures. This was done last year. That initial effort was previously rejected LTL Management was denied bankruptcy protection earlier this year when a federal appeals court determined that the company basically got a blank cheque from J&J, one of the most profitable companies in the world, and so was not eligible for bankruptcy. Kaplan was forced to throw the case out as a result. This time, victims’ solicitors contended that J&J should have cut the maximum sum it committed to paying out cancer claims. Potential payouts in the first bankruptcy would have been supported by a J&J unit that was at the time valued at around $61.5 billion. Kaplan filed a second bankruptcy lawsuit after a federal appeals court ordered it to dismiss the initial bankruptcy. In this instance, the business stated that the most amount it would pay out was $8.9 billion.

J&J “asked the bankruptcy court to help rush that terrible agreement through.” on cancer patients”, declared Andy Birchfield, one of the solicitors battling to get the second bankruptcy annulled. “Thank goodness that ruse is dead with today’s order.”

Legal Approach

J&J changed its legal approach, scaled back its support for LTL, and struck a $8.9 billion arrangement with some of the attorneys representing the business in its lawsuits in an effort to prolong the second bankruptcy. The legal firms have split into opposing factions as a result of that settlement offer, with holdouts insisting that J&J’s new bankruptcy plan should be dismissed just as the first was. Judge Kaplan added that even though he was obligated to dismiss the Chapter 11 case, the backlog of litigation in the legal system, which means that only a small number of customers are affected, continues to bother him. each year to argue their cases before juries.

The great majority of claimants won’t have the chance to pursue recovery for years, if ever, according to Judge Kaplan, because of the glacial pace and the clear increase in the number of new lawsuits. However, the appeals court was clear that financial trouble must be “immediate, urgent, and visible” for a corporation to file for bankruptcy, Kaplan said.

Kaplan, whose courthouse is close to J&J’s corporate headquarters in New Brunswick, New Jersey, ruled with the holdouts this time due to that criteria.

LTL Management LLC, 23-12825, U.S. Bankruptcy Court for the District of New Jersey (Trenton) is the name of the most recent bankruptcy filing.\


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