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Johnson & Johnson Utilizes Controversial Bankruptcy Maneuver

Johnson & Johnson Utilizes Controversial Bankruptcy Maneuver


In October 2021, Johnson &Johnson utilized a controversial bankruptcy maneuver to create a new entity, LTL Management, LLC, to house all liability associated with its talcum powders. LTL Management then filed for Chapter 11 bankruptcy, which is a form of bankruptcy that involves the reorganization of the business affairs, debts, and assets.  J&J employed this maneuver in an attempt to minimize the amount they will pay claimants.

The Talc Claimants’ Committee (the “Committee”) moved to dismiss this bankruptcy case as a bad faith filing that served only to shield the assets of J&J from recovery. The Committee represents the interests of individuals, like you, who have sued J&J alleging that their talc-based products cause cancer. The dismissal motions were heard in February, 2022 and the court denied the committees’ Motion to Dismiss, which allows LTL Management’s bankruptcy to move forward.

The Committee appealed this ruling to the Third United States Circuit Court of Appeals. While this appeal is pending, all litigation against J&J and LTL Management remains stayed. In other words, no one can file any lawsuits against these companies and all current litigation is put on pause until the bankruptcy issue is resolved. If another law firm contacts you and states that their lawyers can file a case on your behalf, please know this is legally prohibited at this time and as soon as the stay is lifted, assuming you have been responsive to all requests for information, The Smith Law Firm is ready to proceed with your case.

We will diligently support the Committee in its attempt to dismiss this bankruptcy. However, if after the appeal, the bankruptcy is allowed to move forward, we will assess how best to handle your claim at that time. No matter how the bankruptcy issue is resolved, please rest assured that we will continue to fight for you and will continue working towards resolving your claim. Even if the bankruptcy does proceed, Johnson & Johnson has set aside funds to resolve talc related lawsuits – bankruptcy does not make your claim moot.