J&J is using a bankruptcy maneuver to block lawsuits over baby powder cancer claims

[TexasTowelie]

Johnson & Johnson is drawing criticism after using a controversial bankruptcy maneuver to block roughly 38,000 lawsuits linked to claims its talc baby powder was contaminated with cancer-causing asbestos.

The health products giant used a quirk of Texas state law to spin off a new company called LTL, then dumped all its asbestos-related liabilities — including the avalanche of lawsuits — into the new firm.

LTL filed for bankruptcy last week in a federal court in Charlotte, N.C., a move designed to sharply limit efforts to recover damages for those who say they were harmed by J&J's baby powder.

"Johnson & Johnson doesn't have this liability any more, they pushed all of it into the company they created just to file for bankruptcy," said Lindsey Simon, a bankruptcy expert at the University of Georgia School of law.

As a result, Simon said "consumers can't recover [damages] against a big solvent company. They have to recover against this smaller fictional company created [by J&J]."

Read more: https://www.tpr.org/2021-10-21/j-j-is-using-a-bankruptcy-maneuver-to-block-lawsuits-over-baby-powder-cancer-claims
(Texas Public Radio)

[LetMyPeopleVote]

1. I read about this proposed stunt a year ago

My son is at a big law firm sent it to me. His bankruptcy partners are not clear that this will work

[TexasTowelie]

2. I hope that they aren't successful with this scheme.

While I suspect that their are some fraudulent claims among those who say they are injured, there are certainly legitimate claims that deserve to be compensated.