Mon Jan 30, 2023, 06:02 PM

U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits

Last edited Mon Jan 30, 2023, 09:12 PM - Edit history (1)

Source: Reuters

Jan 30 (Reuters) - A U.S. appeals court on Monday shot down Johnson & Johnson's (JNJ.N) attempt to offload tens of thousands of lawsuits over its talc products into bankruptcy court. The ruling marked the first major repudiation of an emerging legal strategy with the potential to upend U.S. corporate liability law.

J&J is among four major companies that have filed so-called Texas two-step bankruptcies to avoid potentially massive lawsuit exposure. The tactic involves creating a subsidiary to absorb the liabilities and to immediately file for Chapter 11.

The court ruled the healthcare conglomerate improperly placed its subsidiary into bankruptcy even though it faced no financial distress. J&J’s two-step sought to halt more than 38,000 lawsuits from plaintiffs alleging the company’s baby powder and other talc products caused cancer. The appeals court ruling revives those lawsuits.

Reuters last year detailed the secret planning of Texas two-steps by Johnson & Johnson and other major firms in a series of reports exploring corporate attempts to evade lawsuits through bankruptcies. Monday's decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia dismissed the bankruptcy filed by the J&J subsidiary in 2021. Before the filing, J&J had faced costs of $3.5 billion in verdicts and settlements.

Read more: https://www.reuters.com/legal/jjs-ltl-units-bankruptcy-dismissed-by-us-appeals-court-filing-2023-01-30/

Heard this on news radio this afternoon.

Article updated.

Original article -

Jan 30 (Reuters) - A U.S. appeals court upended Johnson & Johnson's (JNJ.N) attempt to offload into bankruptcy tens of thousands of lawsuits over its talc products, ruling the healthcare conglomerate improperly placed a subsidiary into Chapter 11 proceedings even though it did not face financial distress.

The decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia on Monday dismissed a Chapter 11 petition filed by a recently created J&J subsidiary in October to address more than 38,000 lawsuits from plaintiffs alleging the company’s baby powder and other talc products caused cancer.

Before the bankruptcy, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were eventually awarded a judgment of more than $2 billion, according to bankruptcy-court records.

Several major companies, including J&J and 3M Co (MMM.N), have turned to bankruptcy court to manage their mass tort liabilities. Plaintiff attorneys have called the cases an improper manipulation of the bankruptcy system, while the companies say the Chapter 11 filings are aimed at compensating claimants fairly and equitably.

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30 replies	Author	Time	Post
U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits (Original post)	BumRushDaShow	Jan 30	OP
Did anyone hear the collective "AWW SHIT" coming from the J&J boardroom?	LiberalArkie	Jan 30	#1
Good. They knew and many died. Typical corporate denial instead of admitting the truth.	Evolve Dammit	Jan 30	#2
They have nothing to lose by trying it, and that's part of the problem.	NullTuples	Jan 30	#3
Yep and delaying justice even more	dutch777	Jan 30	#4
Big Tobacco dragged it out for a decade or more. Oxycontin. Asbestos. Agent Orange. Orange 45.	Evolve Dammit	Jan 30	#12
What thing I don't get...	Bayard	Jan 30	#5
Probably because it was the largest and most popular seller	BumRushDaShow	Jan 30	#6
Of course, they have the deepest pockets	Bayard	Jan 30	#8
Yup	BumRushDaShow	Jan 30	#9
Initially, they were the only "brand". It became as synonymous as "Kleenex" or "Xerox". The	Evolve Dammit	Jan 30	#13
There have always been other known "name brands" of talcum powder	BumRushDaShow	Jan 30	#14
Formaldehyde in baby shampoo. That's great. Was Gold Bond around before J&J? "Medicated" huh?	Evolve Dammit	Jan 31	#18
Around the same time	BumRushDaShow	Jan 31	#19
You are without doubt, an amazing resource. Thank you.	Evolve Dammit	Jan 31	#22
You are welcome	BumRushDaShow	Jan 31	#24
Great info. The amounts of drugs like opium, heroin, cocaine, codeine were so widely used.	Evolve Dammit	Jan 31	#25
Oh yeah	BumRushDaShow	Jan 31	#27
It's a wonder we made it this far. I remember powdered opium (cough or diarrhea?), paragorik (sp?)	Evolve Dammit	Feb 1	#28
They still have paregoric (tincture) on the market	BumRushDaShow	Feb 1	#29
Yeah you gotta get your Doc to prescribe it. It is the most effective. "Liquid Gold;" never goes bad	Evolve Dammit	Feb 1	#30
Why is bankruptcy even an option for corprations to avoid paying such damages?	Orrex	Jan 30	#7
Yep. Two-tiered system. All the way down. (n/t)	OldBaldy1701E	Jan 30	#11
With the OP article update, it's apparently a "Texas" thing	BumRushDaShow	Jan 30	#15
No	Sgent	Jan 30	#16
should be a CEO going to jail	republianmushroom	Jan 30	#10
My son and I have been following the use of divisive mergers for a while	LetMyPeopleVote	Jan 31	#17
Another thought	Bayard	Jan 31	#20
Adult women - main purchasers	womanofthehills	Jan 31	#21
When I first heard about it -way- back I switched to cornstarch.	electric_blue68	Jan 31	#26
Despise this company.	Joinfortmill	Jan 31	#23

Response to BumRushDaShow (Original post)

Mon Jan 30, 2023, 06:14 PM

LiberalArkie (14,969 posts)

U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits

1. Did anyone hear the collective "AWW SHIT" coming from the J&J boardroom?

2. Good. They knew and many died. Typical corporate denial instead of admitting the truth.

3. They have nothing to lose by trying it, and that's part of the problem.

4. Yep and delaying justice even more

12. Big Tobacco dragged it out for a decade or more. Oxycontin. Asbestos. Agent Orange. Orange 45.

5. What thing I don't get...

6. Probably because it was the largest and most popular seller

8. Of course, they have the deepest pockets

9. Yup

13. Initially, they were the only "brand". It became as synonymous as "Kleenex" or "Xerox". The

14. There have always been other known "name brands" of talcum powder

18. Formaldehyde in baby shampoo. That's great. Was Gold Bond around before J&J? "Medicated" huh?

19. Around the same time

22. You are without doubt, an amazing resource. Thank you.

24. You are welcome

25. Great info. The amounts of drugs like opium, heroin, cocaine, codeine were so widely used.

27. Oh yeah

28. It's a wonder we made it this far. I remember powdered opium (cough or diarrhea?), paragorik (sp?)

29. They still have paregoric (tincture) on the market

30. Yeah you gotta get your Doc to prescribe it. It is the most effective. "Liquid Gold;" never goes bad

7. Why is bankruptcy even an option for corprations to avoid paying such damages?

11. Yep. Two-tiered system. All the way down. (n/t)

15. With the OP article update, it's apparently a "Texas" thing

16. No

10. should be a CEO going to jail

17. My son and I have been following the use of divisive mergers for a while

20. Another thought

21. Adult women - main purchasers

26. When I first heard about it -way- back I switched to cornstarch.

23. Despise this company.