Judge approves J&J’s two-step plan in Texas to allow ‘fast’ compensation
United States Bankruptcy Court Judge Michael Kaplan ruled that Johnson & Johnson to be allowed to continue its controversial fallout strategy to settle with people who have filed lawsuits claiming its talc-based baby powder causes cancer.
In a Feb. 28 decision, Judge Kaplan of the court in Trenton, New Jersey, ruled that spinoff company LTL Management, which was formed to handle such lawsuits against J&J, could be allowed to continue and file. the balance sheet. In a statement, Kaplan said the decision aims to resolve the issue as quickly as possible so that those who claim to have been harmed by the now discontinued product can claim the compensation they need.
“The Court is aware that its decision will be met with great anguish and concern. The Court remains firmly of the view that justice will be best served by providing prompt and critical compensation through a court-supervised, fair and less costly settlement trust agreement,” he said in his decision.
J&J faces more than 38,000 lawsuits related to its talc products, which plaintiffs say contain cancer-causing asbestos. The powdered product has already been pulled from the market and replaced with cornstarch products, although the company has admitted no wrongdoing and continues to claim its products are safe.
J&J used a unique two-step Texas law to resolve the issue that allowed it to form a new company that would absorb all liabilities – LTL Management LLC – which filed for Chapter 11. The company also officially stated that it does not equate to admission. of guilt, but was instead trained to solve the problem. With its formation, lawsuits filed in different courts in the United States will be routed through the US Bankruptcy Court, leaving only one judge to decide payments. The plaintiffs had wanted jury rule.
LTL management was fully funded to meet settlement amounts set by the bankruptcy court and reportedly has a $2 billion trust to cover any additional expenses. Additionally, LTL would have an additional $250 million available through royalties from certain J&J assets in the event additional payments are required.
The complainants are not satisfied with the decision. In one statement to various media, Atti. Jon Ruckdeschel, one of the attorneys for those suing the claims, had this to say: “Americans suffering from cancer caused by J&J’s asbestos-contaminated talc have a constitutional right to have their case decided by a jury. . We are disappointed that his “bankruptcy” filing for his subsidiary LTL, the handyman, was not dismissed. »
“Bankruptcy court was never intended to be abused in this way by massively profitable corporations as a means of delaying or preventing cancer victims from having their day in court,” he added. .
In an interview with the FinancialTimes, former Texas lawmaker Steven Wolens, author of the two-step bill, said he thought it was misused. J&J has already paid $4.5 billion to deal with talc lawsuits over the past five years.