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Johnson & Johnson has failed at its second attempt at putting its talc litigation subsidiary into bankruptcy. The U.S. Bankruptcy Court noted that the company did not show that outstanding talc litigation had created the level of financial distress that would have warranted such legal action.
The consumer giant faces tens of thousands of negligence lawsuits claiming its talc powder product causes malignant mesothelioma and ovarian cancer. The company formed a subsidiary called LTL Management and then filed for bankruptcy, hoping to avoid paying billions in compensation to victims harmed by their product. The Court initially accepted Johnson & Johnson’s petition, despite taking advantage of a controversial legal strategy known as a “Texas Two-Step.” A U.S. appeals court reversed that decision, the judge noting that bankruptcy protection was only appropriate when a company is in significant financial distress.
Johnson & Johnson filed a second bankruptcy attempt and a settlement offer of $8.9 to be paid to mesothelioma victims. The majority of lawyers representing asbestos victims objected to the company’s approach, arguing that it was an abuse of bankruptcy law that both forced injured victims to accept insufficient terms and prevented others who may be diagnosed with cancer in the future from being able to pursue compensation.
Despite studies linking exposure to talc with malignant mesothelioma and other asbestos-related diseases, Johnson & Johnson continues to claim no scientific proof that its product caused the plaintiffs’ illnesses. The company recently discontinued all of its talc-based products but continues to argue that they are safe and do not cause cancer.
The general opinion among mesothelioma and ovarian cancer victims and their lawyers is that Johnson & Johnson, a powerhouse worth a half-trillion dollars, must step up, take responsibility, and stop claiming bankruptcy.
If you have an asbestos disease and want to know your legal options, contact our Philadelphia asbestos lawyers at Brookman, Rosenberg, Brown & Sandler. Call 215-569-4000 or complete our online form to schedule a free consultation. Located in Philadelphia, we serve clients in Pennsylvania and New Jersey.