Tens of thousands of mesothelioma and ovarian cancer victims have been closely following Johnson & Johnson’s repeated attempts to use a controversial bankruptcy strategy to shield themselves from asbestos liability. Yesterday, the consumer giant saw a federal bankruptcy judge in Houston, Texas reject their third request.
Federal Bankruptcy Judge Rejects J&J’s Asbestos Bankruptcy Petition
Johnson & Johnson has been accused of negligence and product liability by over 90,000 mesothelioma and ovarian cancer victims who blame asbestos in the company’s popular baby powder product for their illness. Though the company has continued to claim its innocence and argue that its talcum powder was not contaminated, it has also faced significant jury verdicts and a growing number of personal injury and wrongful death claims.
To put a stop to the mesothelioma and ovarian cancer litigation, the company has been pursuing a controversial bankruptcy strategy known as a Texas Two-Step which saw them create new corporate entities, assign all of their asbestos liabilities to that new entity, and then have the new entity file for bankruptcy. Despite repeated rejections from federal courts, the company submitted a third proposal in a court they thought would be friendlier. Their new offer received pushback from victims and the Department of Justice bankruptcy trustee.
Judge Rules Not Enough Asbestos Victims Weighed in on Settlement
The settlement offer that was rejected offered $8.9 billion over 25 years to tens of thousands of ovarian cancer claimants and was agreed to by a subset of attorneys representing victims, but other claimants argued that the attorneys had not secured enough claimants’ assent for the agreement to be accepted.
In his decision, Judge Christopher Lopez agreed with the asbestos victims that there were “solicitation irregularities, including the unreasonably short voting time for thousands of creditors,” and denied the bankruptcy petition. The judge noted that the decision had not been an easy one.
If you or someone you love has been diagnosed with mesothelioma or ovarian cancer after using Johnson & Johnson’s Baby Powder or another talcum powder product, the Patient Advocates at Mesothelioma.net can help. Call us today at 1-800-692-8608 to learn more.
