Facing tens of thousands of lawsuits filed by victims of malignant mesothelioma and ovarian cancer, Johnson & Johnson recently attempted to evade legal responsibility by moving its talc business to a newly formed company and then having that company immediately file for bankruptcy. Though the battles over the legality of this maneuver are anticipated to go on for some time, the company lost the first round, with a judge overseeing its Chapter 11 filing refusing to stop talcum powder cases from moving forward.
Two Separate Orders from Bankruptcy Judge Favor Mesothelioma Plaintiffs
Late last month, U.S. Bankruptcy Judge Craig Whitley ruled against Johnson & Johnson’s interests in two different orders pertaining to mesothelioma lawsuits. In the first he ordered the newly formed company LTL Management (which Johnson & Johnson created in order to separate itself from talc liabilities) to show why its bankruptcy case should not be transferred from the Western District of North Carolina to New Jersey. In the second he refused to grant a blanket stay on all lawsuits against the new company.
The formation of LTL Management and its immediate bankruptcy filing represent a maneuver known as a “Texas Two Step” that was meant to shield parent company Johnson and Johnson’s assets from mesothelioma and ovarian cancer victims who blame asbestos in the company’s talc products for their illness. Shortly after its formation, LTL sought a temporary restraining order against plaintiffs, insurance firms and indemnified companies, but the judge denied their request, saying that they hadn’t presented sufficient evidence to meet their burden for the relief that they were seeking. Though lawsuits against Johnson & Johnson subsidiary Johnson & Johnson Consumer Inc., and LTL Management were temporarily suspended, the stay did not include the parent company.
Filing for Bankruptcy in Georgia Called “Cherry Picking” By Mesothelioma Plaintiffs’ Attorneys
Attorneys for mesothelioma victims viewed Johnson & Johnson’s having filed for bankruptcy in North Carolina as “cherry picking” and said that the company had hoped the “court would be blind to justice.” They noted that “J&J’s chief litigation lawyer admitted on the witness stand that J& J has no real connection to North Carolina.” As the case makes its way through the courts, advocates are asking Congress to pass a bill that would stop the type of bankruptcy protection that Johnson & Johnson is seeking, which they say is “so clearly designed to avoid its responsibility.”
If you or someone you love has been affected by asbestos in a talc-based product, the Patient Advocates at Mesothelioma.net can help. Contact us today at 1-800-692-8608.