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A bottle of Johnson and Johnson Baby Powder is seen in a photo illustration taken in New York, February 24, 2016. LTL's bankruptcy proceedings have largely paused the 38,000 lawsuits against J&J, although one case was allowed to proceed to a $18.8 million verdict in July. But David Molton, an attorney for the official committee representing cancer claimants in LTL's bankruptcy, said that a temporary prohibition on new bankruptcy filings was appropriate, given LTL's repeated bankruptcy filings. Kaplan, who dismissed LTL's second bankruptcy, said he was not inclined to block future bankruptcy filings because circumstances could change in the next six months. But the judge said he was open to further written arguments on that point before issuing a formal decision closing LTL's second bankruptcy case next week.

Persons: Johnson, Mike Segar, J, Michael Kaplan, Greg Gordon, David Molton, Kaplan, LTL's, J's, Dietrich Knauth, Cynthia Osterman Organizations: REUTERS, Johnson, LTL Management, U.S . Department of, J, Thomson Locations: New York, Trenton , New Jersey, LTL's, Texas

LTL has said litigation against J&J would imperil its effort to negotiate a comprehensive settlement of all current and future talc claims in its bankruptcy. Before the talc lawsuits could resume, LTL filed for bankruptcy a second time, re-opening the legal battle over the bankruptcy's legitimacy. It has said its second bankruptcy is different because it has less funding available and more plaintiff support for a settlement. U.S. Bankruptcy Judge Michael Kaplan agreed to protect J&J from lawsuits during LTL's first bankruptcy, saying at the time it offered the best way to fairly resolve all of the talc lawsuits together. Kaplan, who is also presiding over the second bankruptcy, will now decide whether to stop the lawsuits again to give LTL a second shot at a bankruptcy settlement.

Kaplan said he shared Richenderfer's concerns, but would not take any action to stop LTL's second bankruptcy filing until he gets more information. J&J faces more than 38,000 lawsuits that have been consolidated in federal court in New Jersey alleging that its talc products sometimes contained carcinogenic asbestos, and those cases have been on hold while LTL pursues a bankruptcy settlement. J&J has said its baby powder and other talc products are safe, do not cause cancer or contain asbestos. LTL attorney Greg Gordon said at Tuesday's court hearing that the second bankruptcy is different because the company has fewer assets available and more support for a bankruptcy settlement. Gordon called that an "over the top accusation," saying plaintiffs' support for the settlement is real and substantial.

☆ Exclusive: Johnson & Johnson considers refiling talc-liability bankruptcy after appeals-court defeat
▼ + stars: | 2023-04-04 | by ( Mike Spector | Thomson Reuters | Mike Spector Is A Correspondent At Reuters Covering Corporate Crises That Span Bankruptcy | ) www.reuters.com time to read: +8 min

[1/2] A bottle of Johnson and Johnson Baby Powder is seen in a photo illustration taken in New York, February 24, 2016. In a court filing Tuesday, lawyers representing a creditors committee of talc plaintiffs said they recently became aware of discussions about a second J&J subsidiary bankruptcy. The J&J subsidiary that was to absorb liability for the talc cases, LTL Management, declared bankruptcy almost immediately after it was created. Andy Birchfield, a plaintiffs' lawyer at law firm Beasley Allen, said on Tuesday that claims “could easily be resolved if Johnson & Johnson would stop playing games and abusing the bankruptcy court process." How the J&J subsidiary might square such a move with the appeals court ruling remained unclear.

A lawyer for Johnson & Johnson’s subsidiary said in a statement that the company would seek a rehearing of the panel’s decision by the full 3rd Circuit court. Gordon’s strategy worked in bankruptcy court but set up J&J for failure when it faced the 3rd Circuit appeals panel. Gordon, at the bankruptcy conference, described the lawsuits as “completely unmanageable” and a dire threat to J&J that could go on for decades. The 7th Circuit Court of Appeals is expected to hear arguments in coming months on a challenge to the 3M subsidiary’s bankruptcy. The litigation, they asserted, should be allowed to proceed against Georgia-Pacific because the parent company did not file for bankruptcy.

Johnson & Johnson has said it would provide a fair amount of money to the subsidiary to pay claims. Johnson & Johnson, valued at more than $450 billion, had about $31 billion in cash and marketable securities on hand at the end of the third quarter, securities filings show. One would absorb all the talc liability; the other would carry on the business free from the threat of billion-dollar judgments. Levesque replied that the “technical aspect” of the subsidiary bankruptcy wasn’t likely to cause concern about J&J’s creditworthiness. Is that what you're saying?” asked Jeffrey Jonas, a Brown Rudnick lawyer representing a creditors committee comprising talc plaintiffs.

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