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Johnson & Johnson Talc Bankruptcy Petition Dismissal is a Win for Mesothelioma and Ovarian Cancer Victims

mesothelioma attorney Dave Butler

By Dave Butler

In a significant victory for injured consumers, the Third Circuit Court of Appeals dismissed the bankruptcy petition of a Johnson & Johnson subsidiary that holds the company’s liabilities for claims brought by thousands of consumers injured by exposure to asbestos-contaminated talc in Johnson & Johnson products.  The dismissal, on January 30, 2023, ends for now J&J’s efforts to avoid full responsibility for the claims of those suffering from mesothelioma, ovarian, and other cancers caused by its asbestos-contaminated products.

Through a series of corporate transactions under a unique Texas law, Johnson & Johnson created two new entities with the intention to funnel its liabilities for claims brought by thousands of injured talc claimants into a new entity which it named LTL Management; while simultaneously funneling all of its profitable business into another entity.  Two days after its formation and freshly saddled with J&J’s talc liabilities, LTL Management filed a petition under Chapter 11 of the U.S. Bankruptcy Code claiming that its talc liabilities placed it in financial distress sufficient to allow it to seek the protections afforded by U.S. bankruptcy laws.

Injured talc victims sought dismissal of the bankruptcy petition, but were denied by a federal court in New Jersey.  Victims appealed that denial to the Third Circuit Court of Appeals, which ruled that the J&J subsidiary had not demonstrated that its petition was filed in good faith and should be dismissed.

In its opinion the court found that “At base level, LTL, whose employees are all J&J employees, is essentially a shell company “formed,” almost exclusively, “to manage and defend thousands of talc-related claims” while insulating at least the assets in a non-bankrupt entity.  The court went on to find that “Because LTL was not in financial distress, it cannot show its petition served a valid bankruptcy purpose and was filed in good faith under” the United States Bankruptcy Code.  In conclusion, the court held that:

Our decision dismisses the bankruptcy filing of a company created to file for bankruptcy. It restricts J&J’s ability to move thousands of claims out of trial courts and into bankruptcy court so they may be resolved, in J&J’s words, “equitably” and “efficiently.” But given Chapter 11’s ability to redefine fundamental rights of third parties, only those facing financial distress can call on bankruptcy’s tools to do so. Applied here, while LTL faces substantial future talc liability, its funding backstop plainly mitigates any financial distress foreseen on its petition date.

Read the court’s full opinion here.

RPWB continues to seek justice for victims of exposure to Johnson & Johnson talc products. If you or a loved one has been diagnosed with mesothelioma after exposure to Johnson & Johnson talc products, please call us at u 1-866-594-8765 or fill out the form on this page to begin your case review.

Dave Butler has 30 years of experience representing mesothelioma victims and their families in cases throughout the United States. He can be reached at 1-866-594-8765 or by emailing dbutler@rpwb.com.

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    With Sixteen Attorneys Named to Best Lawyers List, RPWB is the Top-Listed Product Liability and Class Action Law Firm in the State

    Sixteen RPWB attorneys were selected for the 2023 edition of The Best Lawyers in America® list for numerous practice areas including personal injury, product liability, mass tort, class action and medical malpractice litigation.

    This marks the sixth consecutive year in which RPWB is the top-listed plaintiff law firm in South Carolina for both product liability litigation and class action & mass tort litigation.

    RPWB member Beth Burke was selected as personal injury lawyer of the year in Charleston, South Carolina. In addition to working on medical malpractice and personal injury cases, Burke serves in the leadership of the national lawsuit against 3M for supplying military personnel with defective earplugs. She also represents Marine Corps veterans who developed cancer and other serious conditions after consuming contaminated water at Camp Lejeune between 1953 and 1987.

    Beth Burke is personal injury lawyer of the year in Charleston, S.C.

     

    Here is the full list of RPWB attorneys on the 2023 edition of The Best Lawyers in America®:

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    Greg Lofstead – Product Liability & Mass Tort/Class Actions Litigation

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    Tom Rogers – Medical Malpractice Law & Personal Injury Litigation

    Hoyt Rowell – Healthcare Law & Mass Tort/Class Actions Litigation

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    Ed Westbrook – Mass Tort/Class Actions Litigation

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    Michael Brickman – Antitrust Law, Mass Tort/Class Actions & Securities Litigation

    Charles Patrick, Jr. – Mass Tort/Class Actions & Product Liability Litigation

    Aiken, S.C.

    Dave Butler – Personal Injury & Product Liability Litigation

    Ken Wilson – Personal Injury & Product Liability Litigation

    Edwardsville, Ill.

    Jena Borden – Mass Tort/Class Actions & Product Liability Litigation

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    Three younger attorneys at the firm are recognized as “Ones to Watch,” a distinction for up-and-coming attorneys.

    • Chuck Dukes is listed for antitrust law, commercial litigation, mass tort/class action litigation, personal injury litigation and product liability litigation.
    • Matt Nickles is honored for personal injury and product liability litigation.
    • TAC Hargrove was selected for commercial litigation following his work on litigation associated with the failed V.C. Summer nuclear expansion project.

    About Best Lawyers

    Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. More than 116,000 industry leading lawyers are eligible to vote (from around the world), and we have received more than 17 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2023 edition of The Best Lawyers in America®, more than 12.2 million votes were analyzed. Lawyers are not required nor allowed to pay a fee to be listed; therefore, inclusion in Best Lawyers is considered a singular honor.

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