Plaintiffs who have filed talc lawsuits against Johnson & Johnson are urging a U.S. court to reject a second bankruptcy bid for LTL Management, a holding company established by J&J to handle the litigation.
The Official Committee of Talc Claimants argues LTL can’t establish financial distress and that J&J is abusing the bankruptcy process, according to a Monday press release.
Last week, U.S. bankruptcy judge Michael Kaplan put more than 38,000 talc cases on hold for 60 days in response to LTL’s second bankruptcy bid, which he claimed would be “an uphill battle.”
With this Chapter 11 attempt, J&J is offering to settle the cases for $8.9 billion. In its first bankruptcy bid—which began in October 2021 and froze cases for 18 months—J&J offered a $2 billion settlement.
“The claimants have waited long enough. Hundreds of talc victims have died during the debtor’s first fraudulent bankruptcy,” the committee said in a release. “[This] conduct cannot be rewarded with another 18 months in bankruptcy while talc victims continue to suffer and die.”
In a filing (PDF) on Monday, attorneys for the claimants say that J&J could have made a settlement offer after the first bankruptcy was rejected. Instead, the company filed for the second bankruptcy in an attempt to impose a settlement on plaintiffs.
J&J’s first bankruptcy was dismissed back in January. When an attempt to appeal to the U.S. Supreme Court was rejected earlier this month, J&J filed for its second bankruptcy roughly two hours later.
For its part, J&J claims there is no conclusive evidence that its talc products, including its iconic baby powder, cause cancer. J&J has taken the products of the market—first in North America in 2020—and the rest of the world this year.
J&J now wants claimants to vote on accepting the settlement. The company would need 75% acceptance for it to pass.
“The motion is nothing more than a desperate attempt to prevent the tens of thousands of claimants from deciding for themselves and vote on a resolution plan,” Erik Haas, J&J’s litigation chief, said in a statement. “There is significant support for the plan, including from major plaintiffs’ law firms representing the vast majority of the claimants in this litigation, as well as lawyers who previously led the opposition to the first bankruptcy.”
Many claimants are supporting J&J's settlement offer and want a chance to vote. A group of 14 law firms called the Ad Hoc Committee of Supporting Talc Claimants says it represents more 55,000 talc plaintiffs.
“The people poisoned as a result of their prolonged use of J&J’s talcum powder deserve an opportunity to vote," the committee said in a statement. "This litigation has been ongoing for the better part of a decade and tens of thousands of cancer victims and their families are still stuck waiting for justice. This resolution is the best chance for these families to obtain that recourse and we believe they should be given the opportunity to have a say in how their cases are resolved.”
J&J’s offer comes after years of litigation, including a high-profile trial that resulted in a $4.7 billion verdict against the drugmaker. The verdict was later reduced to $2.1 billion after appeals.
J&J has lost nine talc trials that are either on appeal or have been resolved. Out of 41 trials, 32 have ended in a win by J&J, a mistrial or plaintiff verdicts that were reversed on appeal. Separately, the company in 2020 moved to settle around 1,000 cases for $100 million, Bloomberg reported at the time.
J&J reported $94.94 billion in revenues and $17.94 billion in net earnings last year.