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Johnson & Johnson Talcum Powder Lawsuit Facts
TorHoerman Law is no longer accepting claims for the Johnson & Johnson Talcum Powder Lawsuit.
Intake Closed
The Johnson and Johnson talc powder lawsuits came in full swing in early 2023.
Before that, the company announced its plans to cease the sales of its flagship product, Johnson’s Baby Powder.
The company followed through on the announcement, dropping its sales profits for 2022 and early 2023.
However, that was not the end of the company’s woes.
The Proposed Talcum Powder Settlement and Johnson & Johnson’s Controversial Attempt at Bankruptcy
In 2023, Johnson and Johnson offered a Talcum Powder Settlement amounting to $8.9 billion.
The company stated that the settlement would pay the 40,000 talcum powder plaintiffs who had already filed their talcum powder cancer lawsuits.
The company shifted its talc liabilities to a subsidiary company, LTL Management LLC, which filed for bankruptcy at the Third Circuit Court of Appeals to sidestep its litigation liabilities.
However, the company failed at the bankruptcy filing, meaning it was still on the hook to pay present and future talcum powder plaintiffs.
Johnson & Johnson’s Subsidiary Attempted to File for Bankruptcy a Second Time
Federal Bankruptcy Judge Michael Kaplan denied Johnson and Johnson’s filing because it wasn’t the fairest way to resolve the matter.
Meanwhile, Judge Thomas Ambro, another member of the judge panel overseeing the ruling, ruled against J&J’s filing stating that the company wasn’t in “financial distress.”
As the company failed to get the desired result in bankruptcy court, it eventually offered to pay a settlement that was almost quadruple its previous offer.
On April 4, 2023, Johnson and Johnson released a statement, offering to pay $8.9 billion to the plaintiffs who have developed ovarian cancer, mesothelioma, and other health conditions from its talcum powder products.
The Texas Two-Step: J&J’s Strategy to Pay Out Talc Lawsuits
Johnson and Johnson’s attempt to file their subsidiary for bankruptcy failed multiple times throughout the talcum powder lawsuits.
The company has done this to shield itself from further financial impact in light of the billions of dollars it may be liable to pay in settlements.
After the bankruptcy court dismissed J&J’s original strategy multiple times, the company created a subsidiary company, LTL Management.
The creation of the subsidiary company was critical to Johnson and Johnson’s legal strategy.
Johnson and Johnson resorted to what’s referred to as the Texas Two-Step.
The Texas Two-Step is a tactic used by financially solvent companies to shift their settlement liabilities to subsidiary companies.
After shifting the settlement liabilities, the company files for bankruptcy through the subsidiary company.
This enables the parent company to reduce the financial impact of multidistrict litigation by paying out plaintiffs using the subsidiary company’s liquidated assets.
In the context of the Talcum Powder Litigation, the subsidiary company is LTL Management.
Johnson and Johnson created the company in 2021 to shield itself from future legal liabilities.
With Johnson and Johnson filing bankruptcy through LTL Management, the company put itself in a better position to dole out settlement payouts.
In short, Johnson and Johnson protects its financial assets and settles the talcum powder case once and for all.
At the moment of writing, the Talc Powder Litigation is paused, but we are still taking on new Talcum Powder Cases.
