Will Shell Company Bankruptcy Allow Johnson & Johnson to Avoid Talc Lawsuit Liability?
Johnson & Johnson once had a squeaky-clean reputation in corporate America. Its baby powder and talc products also had consumers trusting rating the company as one of the most trusted brands in America. However, investigations by the New York Times and Reuters in 2018 revealed that the company has known that asbestos was contaminating its talcum powder for decades.
The Talcum Powder Lawsuits
Asbestos is a known carcinogen, and now Johnson & Johnson faces more than 38,000 lawsuits over its asbestos-contaminated talc products charging that its products cause cancer. The lawsuits seek to have Johnson & Johnsons create a trust to compensate victims in much the way companies with asbestos lawsuit liabilities formed trusts to compensate victims of mesothelioma. Johnson & Johnson has already faced verdicts in excess of $4 billion.
Shell Company to Avoid Bankruptcy
In response to the financial risk it faces, Johnson & Johnson created a new company, LTL Management, LLC., and spun all of its talc liabilities into this new subsidiary. Then J&J placed the new company in bankruptcy in October of 2021. The bankruptcy move is an attempt to sharply limit any liability J&J might face from talc lawsuits, despite J&J’s status as one of the wealthiest companies in the world with cash reserves over $25 billion.The plaintiffs are, of course, fighting J&J’s ability to spin off its liabilities and bankruptcy a company, and all of its suits against J&J are effectively on hold until a court resolves the dispute. U.S. Bankruptcy Judge Michael B. Kaplan says that he’ll rule on whether J&J can legitimately place LTL into bankruptcy by February 28, 2022. If he allows the LTL bankruptcy to proceed, the bankruptcy will create a company-funded trust to compensate victims of current and future claims. However, the move will seriously limit victims’ ability to bring future suits against J&J.
Hire an Experienced Asbestos Attorney
If you or someone you love is facing lung cancer after exposure to talcum powder, we may be able to help. Give the Madeksho Law Firm a call at 1-888-910-6376 or contact us online. Your initial consultation is always free, and you don’t pay a fee unless we recover money on your behalf.
