Talc Plaintiffs Lose Bid to Prevent Proposed J&J Bankruptcy
A federal judge has blocked a group of cancer patients who were attempting to stop Johnson & Johnson from filing for bankruptcy. The plaintiffs filed an order in June 2024 asking a federal judge to block J&J’s latest bankruptcy plans.
U.S. District Judge Michael Shipp said he couldn’t grant the motion because any harm from the bankruptcy proposal to the plaintiffs was “strictly hypothetical.” He said he had no jurisdiction to resolve a dispute over “events that have not, and may never, occur.”
Attorneys for the plaintiffs call the company’s bankruptcy plan a fraudulent attempt to ensure billions of dollars are out of plaintiffs’ reach. They say it’s a way J&J can settle the tens of thousands of talc lawsuits it faces without paying the full compensation plaintiffs deserve.
Talc Settlement Offer & Failed Bankruptcies
In May 2024, J&J offered to pay $6.475 billion to settle lawsuits as part of a prepackaged bankruptcy plan. If J&J receives at least 75% of support from claimants, the company’s plan will be approved. If approved, it would settle 99.75% of the company’s remaining lawsuits over asbestos-contaminated talc. A final vote on that plan is set for July 26, 2024.
The company has failed twice in its attempts to file for bankruptcy in hopes of settling the more than 60,000 lawsuits it faces. A judge denied both attempts, saying the company didn’t qualify for bankruptcy protection because it wasn’t in financial distress.
A strategy called “the Texas two-step” relies on J&J creating a subsidiary to absorb the company’s talc liability. Then the subsidy would declare bankruptcy to resolve the cases.
Johnson & Johnson Lawsuits, Asbestos Concerns
The talc lawsuits center on claims that J&J’s talc-based products caused plaintiffs’ ovarian cancer and mesothelioma. The company continues to argue its talc wasn’t contaminated with asbestos.
J&J has spent approximately $1 billion on its legal defense in talc cases. The company has already paid out several multi million dollar verdicts linked to asbestos exposure from its talc-based products.
Talc and asbestos are naturally occurring minerals found close together in the earth. Talc can easily become contaminated with asbestos. Asbestos is the primary cause of mesothelioma and several other asbestos-related diseases.