J&J subsidiary LTL Management has refiled for bankruptcy following Third Circuit rejection
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To this end, J&J has also agreed to contribute up to US$8.9bn, payable over 25 years, to resolve all the current and future talc claims.
This marks a significant increase on the $2bn committed in connection with LTL’s initial bankruptcy filing in October 2021.
According to J&J, LTL has also secured commitments from over 60,000 current claimants to support a global resolution on these terms.
In January, the Third U.S. Circuit Court of Appeals in Philadelphia dismissed LTL’s initial Chapter 11 petition on the grounds that LTL did not face financial distress.
According to a note from LTL, the refiled case “addresses the Third Circuit’s concerns and relies on well-established legal precedent to obtain the equitable resolution available only in bankruptcy”.
J&J stressed that neither LTL’s original filing nor the re-filing is an admission of wrongdoing and has doubled down on its longstanding position that its talcum powder products are safe; claimants accuse J&J’s talc products of causing ovarian cancer and mesothelioma due to the alleged presence of asbestos.
“The company continues to believe that these claims are specious and lack scientific merit,” said Erik Haas, Worldwide Vice President of Litigation at J&J.
“However, as the Bankruptcy Court recognised, 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 reorganisation plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner, and enables the company to remain focused on our commitment to profoundly and positively impact health for humanity.”
Attorneys representing ovarian cancer and mesothelioma patients seeking damages from J&J have expressed dissatisfaction with the proposal.
"Ovarian cancer and mesothelioma victims should and will be outraged if J&J attempts another dodge into bankruptcy," said Andy Birchfield, who heads the Mass Torts section of the Beasley Allen law firm.
"J&J is seeking an extremely deep discount on justice and is not really offering anything other than another bankruptcy and more delay tactics.
“An $8.9bn amount is woefully inadequate to cover even the current ovarian cancer and mesothelioma claims, much less any future claims."
It will transition to an all cornstarch-based powder portfolio instead.