J&J Subsidiary's 3rd Bankruptcy Bid: Aiming for $10 Billion Talc Deal

White Baby Talcum Powder Container

J&J Aims to End Talc Litigation with $10 Billion Deal

In the ongoing Johnson & Johnson (J&J) talc cancer litigation, the healthcare company's subsidiary, Red River Talc, has filed for bankruptcy protection for the third time, Reuters reports.

This filing is intended to advance a proposed $10 billion settlement to address thousands of lawsuits alleging that J&J’s talc-based products, such as baby powder, led to cancer. While the company denies the allegations, the litigation remains a point of significant legal focus.

Third Bankruptcy Filing Aims to Settle Claims

J&J is currently facing more than 62,000 lawsuits from individuals who claim that their talc products were contaminated with asbestos, resulting in ovarian cancer and mesothelioma diagnoses. 

Despite maintaining that its products are safe, J&J has moved to shield itself from further lawsuits by filing for bankruptcy through Red River Talc. The most recent filing was made in a Houston federal bankruptcy court as part of an effort to enforce a comprehensive settlement.

A significant portion of claimants has already shown support for the proposal. Erik Haas, J&J’s worldwide vice president of litigation, stated that 83% of current talc claimants voted in favor of the settlement, calling it "fair and equitable." However, the settlement plan has sparked differing opinions among those representing the plaintiffs.

Disagreements Among Plaintiffs' Attorneys

The settlement proposal has split attorneys representing the cancer victims. Opponents argue that J&J is using the bankruptcy system to reduce compensation for victims. 

Attorney Andy Birchfield, one of the leading voices against the deal, described the vote as a "fraudulent effort" and accused J&J of manipulating the process to diminish the claims of ovarian cancer patients. He and his colleagues plan to ask the court to either dismiss the bankruptcy or transfer the case to New Jersey, where prior attempts to resolve the litigation were unsuccessful.

However, some attorneys see the settlement as a reasonable way forward. Allen Smith, who has previously represented 11,000 claimants, has voiced support for the deal, emphasizing the benefits of reaching a resolution through bankruptcy.

Legal Barriers and the Road Ahead

J&J's third attempt at bankruptcy faces several legal obstacles. Recent decisions, such as the U.S. Supreme Court ruling earlier this year, could influence how bankruptcy cases are handled when it comes to companies like J&J. 

Additionally, federal lawmakers have introduced legislation that aims to limit the use of bankruptcy protection by financially strong corporations, which could add further difficulty to J&J's strategy.

Under the terms of the proposed settlement, J&J would distribute about $10 billion over 25 years. The company recently added $1.1 billion to the settlement fund and allocated $650 million toward legal fees for attorneys who had previously opposed the settlement. 

This third bankruptcy filing differs from past efforts by focusing specifically on ovarian and gynecological cancer claims, following settlements related to mesothelioma.

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