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Judge rejects 6-month bankruptcy ban for J&J’s talc subsidiary

Judge rejects 6-month bankruptcy ban for J&J's talc subsidiary - A U.S. bankruptcy judge on Friday dismissed informally the second bankruptcy filing of Johnson & Johnson's subsidiary for talc; however, he ruled against cancer sufferers' demands to impose a six-month moratorium of future bankruptcy filings from the firm.

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NEW YORK, Aug 14 (The Justice Now) – A U.S. bankruptcy judge on Friday dismissed informally the second bankruptcy filing of Johnson & Johnson’s subsidiary for talc; however, he ruled against cancer sufferers’ demands to impose a six-month moratorium of future bankruptcy filings from the firm.

U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey, had already decided that the matter be dismissed, which ended J&J’s attempt to file bankruptcy to settle hundreds of lawsuits alleging its talc products could contain asbestos, which caused mesothelioma as well as cancer of the ovary.

The judge previously voiced doubts regarding a ban on J&J LTL Management LLC, its affiliate LTL Management LLC from turning into bankruptcy for the third time, claiming that he didn’t have the “crystal ball.”

J&J has stated that its talc products are not asbestos-based and don’t cause cancer. It plans to appeal against dismissing the second chapter of LTL’s bankruptcy.

In a statement issued on Friday, the company praised Kaplan’s decision regarding future bankruptcy filings, stating that the decision was consistent with previous rulings by the judge in urging the parties to come to a settlement based on “remarkable progress” to reach an agreement. The spokesperson for the company could not respond to a query about whether LTL was planning to file for bankruptcy again.

J&J was planning an $8.9 billion settlement for all cancer-related claims. However, the plan was based on a bankruptcy court ruling that would have stopped future lawsuits against the firm.

The bankruptcy proceedings of LTL had primarily put an end to the 38,000 lawsuits brought against J&J. However, one case was allowed to go to a $18.8 million settlement in July.

Andy Birchfield, a lawyer for cancer patients who is a lawyer for people living with cancer, said that he hopes J&J “recognizes the writing on the wall” and is not attempting to delay the litigation through a second attempt at a failed bankruptcy strategy. Birchfield said that patients with cancer are keen to go to trial or settle their cases outside of bankruptcy courts.

J&J’s first attempt to settle the dispute through bankruptcy started in 2021. The company released its talc obligations to the newly formed LTL through a corporate division known as the “Texas two-step” and immediately bankrupted LTL.

The first bankruptcy of LTL was thrown out in April when an appeals court in the U.S. appeals court decided that it wasn’t financially distressed enough to qualify for bankruptcy protection.

The second attempt by LTL, based on the planned $8.9 billion agreement to resolve ongoing and future talc lawsuits, was similarly rebuffed following Kaplan’s determination that the company was not yet in the type of “immediate” distress required by the appellate court’s decision.

This case’s name can be referred to as LTL Management, U.S. Bankruptcy Court for the District of New Jersey, No. 23-12825.

For LTL: Greg Gordon of Jones Day; Allison Brown of Skadden, Arps, Slate, Meagher & Flom

The panel of plaintiffs in talc: David Molton, Michael Winograd, Jeffrey Jonas, and Robert Stark of Brown Rudnick; Melanie Cyganowski of Otterbourg; Jonathan Massey of Massey & Gail, and others.

If you or someone close to you has used talcum powder and has been diagnosed with mesothelioma, ovarian cancer, or another severe disease and you are eligible, you could be able to sue Johnson & Johnson. Johnson & Johnson was accused of obscuring the dangers of talcum powder over the years, and a lot of victims have been hurt because of it.

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