For the second time this year, a U.S. Bankruptcy Court struck down Johnson & Johnson’s (J&J) attempt to seek bankruptcy protection of its subsidiary, LTL Management.
We previously reported J&J’s loss in the 3rd Circuit Court of Appeals after a January 2023 ruling dismissed their bankruptcy legal maneuver to halt the cases of over 40,000 consumers who contracted cancer from using their asbestos-contaminated products.
On July 28, Judge Michael Kaplan ruled that “LTL’s petition was not filed in good faith because it lacks imminent and apparent financial distress under applicable standards.” Indeed, even though J&J claims they may exhaust their funding on future talc liabilities, it still does meet the criteria of imminent financial distress.
As predicted, J&J plans to appeal Judge Kaplan’s ruling despite the fact that their much-criticized plan has been called an “abuse of the bankruptcy system.”
Asbestos plaintiffs and their legal teams are fed-up with J&J’s reluctance to face accountability. An attorney representing talc plaintiffs, stated, “J&J has spent two years trying to convince us that somehow a company worth a half-trillion dollars is bankrupt. It’s time for the nonsense to stop and for J&J to accept responsibility.”
To read the full article in Reuters.
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