Johnson & Johnson Spins Off Their Talcum Powder Business Into Bankruptcy To Protect The Parent Company
Plaintiffs with ovarian cancer fear they may not live long enough to collect any settlement the company offers
Monday, October 18, 2021 - CBS News and Reuters report this morning that health care product conglomerate Johnson & Johnson has followed through on their threat to insulate the company from legal liabilities by placing their talcum powder business into a separate legal entity and then declaring it bankrupt. Spokespersons for Johnson & Johnson told Reuters that the move establishes a company that is separate from the multi-billion dollar parent company and insulates the latter from the legal liabilities that may stem from the more than 35000 lawsuits that are filed against them in Federal court. "Officials with Johnson & Johnson said they have created a new subsidiary called LTL Management. Johnson & Johnson said it then moved $2 billion in baby powder lawsuit settlement money to LTL, then submitted LTL for bankruptcy. LTL Management filed for bankruptcy protection in North Carolina on Thursday and listed its liabilities between $1 billion and $10 billion." About 35,000 women with ovarian cancer have filed talcum powder cancer lawsuits alleging that using Johnson's Baby Powder for feminine hygiene after and between showering caused them to develop cancer of the ovaries.
Plaintiff attorneys are concerned that the move effectively stays all current and pending court proceedings against the company until a bankruptcy judge determines the timing and amount of any payouts to women that allege the company sold baby powder without providing a talcum powder cancer warning on the product. Johnson & Johnson's talcum powder assets could be sold and the proceeds put into a trust to pay the potential mass settlement as was done with talc supplier Imreys Inc. Imreys is named as a codefendant with J & J in lawsuits for claiming that the talc they sold Johnson & Johnson was asbestos-free. Johnson & Johnson has set aside $4 billion to pay talcum powder cancer settlements. Imereys spun off their North American talc mining subsidiary and sold it to Magris Resources Canada Inc., a company that uses less than cosmetic grade talc for industrial purposes. Johnson & Johnson discontinued selling the iconic Johnson's Baby Powder throughout North America last year after sales declined from what the company claimed was misleading information in the media over talc cancer allegations, when in fact, the US Food and Drug Administration (FDA) had just tested Johnsons baby powder and found it contained asbestos, a known carcinogen. Johnson & Johnson continues to sell Johnson's baby powder _ in India and other countries.
Plaintiff attorneys think the move will disenfranchise plaintiffs and could force them to settle their cases for a fraction of the amounts that were being paid to previous plaintiffs, and also to make them wait years or over a decade to get paid. Last year the US Supreme Court refused Johnson & Johnson's appeal of a $2.1 billion jury award paid to 22 plaintiffs, several of whom died during the court proceedings. Many women with ovarian cancer discover they have the disease in its very late stages and have only a short time to live, a fact that a bankruptcy judge will hopefully take into consideration when deciding when to pay them.
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