Home USA Cancer Patients’ Attempt to Halt Proposed J&J Talc Bankruptcy Fails

Cancer Patients’ Attempt to Halt Proposed J&J Talc Bankruptcy Fails

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A federal judge on Friday denied a request from a group of cancer victims to block Johnson & Johnson’s pursuit of a proposed bankruptcy settlement aimed at resolving tens of thousands of lawsuits alleging that the company’s talc products, including baby powder, contain cancer-causing asbestos.

The plaintiffs had sought a preliminary injunction in New Jersey on June 11 to prevent J&J from filing for bankruptcy outside the state, a move intended to thwart a $6.48 billion settlement plan. The motion was part of a class action lawsuit led by plaintiffs’ attorneys opposed to the proposed settlement.

However, U.S. District Judge Michael Shipp ruled against the motion, stating that any harm to the victims was speculative because the events in question had not yet occurred and might never happen. He determined that he lacked jurisdiction to intervene in such hypothetical disputes.

A lawyer representing the plaintiffs did not immediately respond to a request for comment on Friday evening.

Johnson & Johnson aims to secure support from 75% of claimants under the prepackaged bankruptcy plan, with a voting deadline set for July 26.

The healthcare giant faces lawsuits from over 61,000 plaintiffs alleging that its talc products caused ovarian cancer or mesothelioma, a lethal cancer associated with asbestos exposure.

Johnson & Johnson maintains that its talc is safe, free of asbestos, and does not cause cancer. The company argues that the bankruptcy settlement offers fair and equitable compensation to claimants, contrasting it with a civil justice system where many plaintiffs receive no compensation while a few receive substantial awards.

Attorneys for the plaintiffs opposing the plan contend that it is an improper maneuver to shield billions of dollars in assets from plaintiffs, depriving them of rightful compensation.

Johnson & Johnson has previously attempted unsuccessfully to use a bankruptcy strategy, known as the “Texas two-step,” involving a subsidiary to absorb talc liabilities and declare bankruptcy. Two courts previously ruled that the subsidiary did not meet the financial distress criteria necessary for a legitimate bankruptcy filing.

The company’s current plan focuses on resolving claims related to ovarian and other gynecological cancers allegedly linked to talc through bankruptcy proceedings. It has settled most mesothelioma cases outside of bankruptcy and recently finalized a separate $700 million agreement to resolve claims with state attorneys general.