How is Johnson & Johnson Using Bankruptcy to Derail Baby Powder Lawsuits?
Johnson & Johnson is a giant corporation worth more than $400 billion. It was once one of the most trusted companies in America with a squeaky-clean image driven by its baby powder fresh products. As the company grew and diversified, it grew to one of the world’s largest pharmaceutical and consumer packaged goods companies. In 2021, the company had more than $93.7 billion in revenue.What goes up must come down, and the last decade has seen opioid-related pharmaceutical litigation and more than 38,000 lawsuits related to its talc-based products. It turns out that the squeaky-clean talc it sold for decades was contaminated by asbestos, causing ovarian cancer in thousands of its customers. It sounds like they can afford to fix their mistakes, right? Unfortunately, it seems that the company doesn’t want to take responsibility.
Bankruptcy as a Responsibility-Avoiding Corporate Tool
Johnson & Johnson originally agreed to settle some pending lawsuits
for $100 million. But it turns out that the company may have planned to sidestep legal judgments all along through the use of the “Texas Two-Step,” a creation of Texas bankruptcy law. Texas law allows companies to split into two entities and pass pending lawsuits to the new, smaller subsidiary. The smaller company then files for Chapter 11 bankruptcy.When a company files for bankruptcy, the court halts all litigation against it. As a result, Johnson & Johnson’s new “subsidiary” can stall litigation for tens of thousands of plaintiffs and force them to split a much smaller pot as compensation for their injuries. While some federal legislators are calling for an end to this litigation loophole, Johnson & Johnson may squeak away with its billions, leaving thousands of sick customers in the lurch.
You Need Experienced Legal Advice
If you or someone you love has ovarian cancer that may have been caused by using asbestos-contaminated talcum powder products, you need skilled legal guidance. You may be entitled to file a lawsuit, and the lawyers at the Madeksho Law Firm can help. Call us at 1-888-910-6376 or contact us online. Your consultation is always free, and you don’t pay a fee unless we recover money on your behalf.
