In a win for mesothelioma plaintiffs, a three-judge panel in the Federal
Appeals Court/Third Circuit court of Philadelphia has
unanimously ruled that Johnson & Johnson cannot use bankruptcy to sidestep more than
40,000 talcum-powder lawsuits.
A year ago, J&J formed the subsidiary, LTL Management, in order to
deal with their talc liabilities for the express purpose of declaring
it bankrupt days later, a controversial tactic known as the
On Monday, the Court dismissed that LTL Management/J&J, due to their
massive assets, was facing any genuine financial distress that a bankruptcy
was meant to address.
J&J will undoubtedly challenge the ruling and appeal to the U.S. Supreme
Court. It could take up to a year for the Supreme Court to accept or reject
and if it accepts, another year or two until the matter is decided.
Although this is a promising development and likely to discourage profitable
companies from declaring bankruptcy in order to limit compensation, asbestos
claimants are still a long way off from being able to sue J&J in court.
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