Johnson & Johnson (J&J) is reportedly on the brink of announcing that it has secured the necessary support from claimants to proceed with a $6.5 billion settlement to resolve tens of thousands of lawsuits alleging its talc-based products caused cancer. This development, as reported by Reuters and Bloomberg, brings the pharmaceutical giant one step closer to putting an end to years of contentious litigation.
The company is expected to reveal as early as Friday that over 75% of claimants have voted in favor of the proposed settlement, according to Reuters. This figure is crucial, as it meets the legally required threshold for a bankruptcy judge to approve the settlement plan.
Following this anticipated announcement, J&J is set to initiate its third attempt at employing the so-called "Texas two-step" bankruptcy maneuver. This strategy involves transferring its talc liabilities to a newly created subsidiary, which will then file for Chapter 11 bankruptcy protection, potentially as soon as next week, as per Bloomberg.
Despite the progress towards a settlement, J&J maintains its stance that its talc products are safe and do not cause cancer.
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The path to this point has been fraught with challenges. J&J's previous two attempts at the "Texas two-step" were rejected by federal courts in New Jersey, the company's home state. The courts ruled that J&J's subsidiary lacked the requisite "financial distress" to qualify for Chapter 11 protection. In this third attempt, the company plans to file for bankruptcy in Texas, hoping for a more favorable interpretation of the financial distress standard.
The proposed $6.5 billion settlement covers claims related to ovarian and other gynecological cancers, representing the majority of lawsuits J&J faces. However, it notably excludes claims related to mesothelioma, a rare and aggressive cancer linked to asbestos exposure. J&J has consistently denied that its talc products ever contained asbestos.
The company has already settled almost all mesothelioma cases and claims from states alleging consumer deception outside of bankruptcy court. This strategic move removes some of the opposition that previously hampered its bankruptcy efforts.
While the settlement appears to be gaining traction, some lawyers representing cancer victims remain opposed to J&J's bankruptcy strategy and continue to fight against the company in court.
J&J's pursuit of bankruptcy protection through its subsidiary aims to achieve a global settlement that would permanently halt all related lawsuits and prevent any new ones from being filed, all while capping the company's financial liability. In contrast, any settlement reached outside of bankruptcy court could leave the door open for future lawsuits, potentially exposing J&J to more multibillion-dollar verdicts.
J&J has won most cases that have gone to trial. However, its losses have been significant, including a Missouri verdict for ovarian cancer victims that ultimately cost J&J $2.1 billion.
If you or someone close to you has been diagnosed with ovarian cancer or mesothelioma after using talcum powder, you might qualify to pursue a talcum powder Lawsuit. Injury Claims partners with lawyers specializing in talcum powder-related cancer cases.
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