Johnson & Johnson Talcum Powder Spin-Off Bankruptcy Denied For A Second Time
Johnson & Johnson may now be held fully financially accountable for failing to warn consumers that asbestos lurked in their iconic baby powder
Wednesday, August 2, 2023 - Johnson & Johnson's second attempt at designating their LTL management subsidiary as bankrupt has failed. Judge Michael Kaplan of the U.S. Bankruptcy Court for the District of New Jersey has declared that the company has not met the logistic requirements that would grant them the protection of federal bankruptcy laws. LTL Management contains $8.9 billion in cash and many hundreds of times that amount in potential losses from lawsuits alleging that Johnson's Baby Powder caused ovarian cancer and mesothelioma, both death sentences for those unlucky enough to be diagnosed with either of them. According to the New York Times, " Judge Michael Kaplan of the U.S. Bankruptcy Court for the District of New Jersey, said LTL's bankruptcy case must be dismissed because the lawsuits did not put the company in "imminent or immediate financial distress." Earlier this year, the U.S. Court of Appeals for the Third Circuit in Philadelphia dismissed the first bankruptcy effort for the same reason." Plaintiff lawyers pleased with the decision to deny bankruptcy protection told the NYT that it was time for Johnson & Johnson, a financially healthy company to take financial responsibility for their reprehensible corporate conduct. "Andy Birchfield, a lawyer representing some of the cancer victims, said the ruling was a win for his clients. "J&J has spent two years trying to convince us that somehow a company worth a half-trillion dollars is bankrupt," he said. "It's time for the nonsense to stop and for J&J to accept responsibility," according to the NYT.
The judge's ruling may now open the door for talcum powder lawsuits against Johnson & Johnson to proceed. More than 38,000 people have filed talcum powder cancer lawsuits against the company and double that amount have registered their intent to file such a lawsuit with talcum powder cancer lawyers. The lawsuits were put on hold for two years as the company tried to implement an arcane financial scheme dubbed the Texas Two-Step. The TTS would have enabled Johnson & Johnson to place all of their current and future talcum powder cancer-related lawsuits into their LTL subsidiary and then declare it bankrupt. Johnson & Johnson offered the plaintiffs $8.9 billion to settle the claims and many talcum powder lawyers clients were willing to accept the deal. Lawyers representing Johnson & Johnson pledged to continue to work with counsel representing more than 60,000 talcum powder cancer claimants to try and come up with a settlement. Interestingly, Judge Kaplans ruling to deny the Johnson & Johnson bankruptcy comes after the conclusion of the single talcum powder cancer lawsuit that was allowed to proceed. A California man was awarded $18.9 million dollars in compensatory damages for the pericardial mesothelioma the jury agreed was caused by his mother's use of Johnson's Baby Powder on him regularly and repeatedly as a child during diaper changes. Punitive damages which could be as much as ten times the compensatory amount could be awarded in the days to come. The plaintiff has only weeks to live as his disease is aggressive and fatal, a condition which, under California law, enabled his case to be moved to the front of the line and be heard before his imminent demise.
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