After months of hearings and legal pleadings, a federal bankruptcy court has reached a decision that disappointed victims of mesothelioma who blame asbestos in Johnson & Johnson products for their illness. Judge Michael Kaplan gave the company a green light to move forward with their bankruptcy proceeding, effectively putting a halt to more than 38,000 personal injury lawsuits alleging harms caused by their talc-based products.
Bankruptcy Judge Rejects Argument from Mesothelioma Plaintiffs
Despite robust arguments from mesothelioma and ovarian victims’ attorneys and concerns from lawmakers about the use of a bankruptcy strategy known as a “Texas two-step,” Judge Kaplan ruled that Johnson & Johnson’ use of a divisive merger was “unquestionably proper.”
Prior to the judge’s ruling, the iconic consumer product company had already seen over $3.5 billion in verdicts and settlements awarded to victims of mesothelioma and other asbestos-related diseases and had set aside an additional $2 billion for future settlements. They then created LTL Management LLC, assigned its talc liabilities to the newly formed company, and had the new company file for bankruptcy.
Mesothelioma Attorneys Will Appeal What They Call an Abuse of the Bankruptcy System
Mesothelioma and asbestos-related disease victims were represented by several attorneys, who decried the judge’s decision. Said one, “The bankruptcy code was never intended to be abused in this way by massively profitable corporations as a means to delay or prevent cancer victims from having their day in court.” They plan to appeal the decision.
Concerns voiced by mesothelioma victims were echoed by U.S. Senator Sheldon Whitehouse, who indicated that if the ruling stood and action was not taken to change the laws, corporations could use the strategy to “hide assets in plain view.” For its part, Johnson & Johnson’s new entity has indicated that it intends to “work with claimants’ counsel and the mediator to reach an equitable and efficient resolution” and that the $2 billion that has been set aside to settle talc claims should be considered a starting point rather than a cap.
If you or someone you love has been diagnosed with malignant mesothelioma, you need experienced and knowledgeable guidance. The Patient Advocates at Mesothelioma.net can help. Contact us today at 1-800-692-8608.
