US: As part of a business subsidiary’s second attempt to settle disputes in bankruptcy proceedings, a U.S. judge on Thursday halted the majority of the tens of thousands of lawsuits that claimed Johnson & Johnson’s JNJ.N baby powder and other talc products caused cancer and stopped any trials. Lawyers for the talc plaintiffs who are opposed to the proposed $8.9 billion settlement question J&J’s claim that it has broad support.
The majority of the ruling allowed J&J’s request to halt litigation
During a hearing in Trenton, New Jersey, U.S. Bankruptcy Judge Michael Kaplan temporarily halted the majority of the legal proceedings. The majority of the ruling allowed J&J’s request to halt litigation while it works to settle with current plaintiffs permanently and set aside funds for future claims. In reference to the arguments brought to him earlier this week on the second bankruptcy case, Kaplan stated during the court hearing on Thursday that “I have more questions than answers.”
LTL Management filed for bankruptcy a second time earlier this month
A federal district court in New Jersey had merged almost 38,000 talc complaints when the judge intervened. As long as no trials started, he permitted other cases to move forward with depositions and other matters. The judge stated that other cases could be brought against J&J. Despite a federal appeals court ruling in January that invalidated its first Chapter 11 filing on the grounds that the J&J business was not in financial difficulty, the J&J subsidiary, LTL Management, filed for bankruptcy a second time earlier this month to aid in the completion of the most recent acquisition.
Postponing trials relieves pressure on J&J
According to LTL Management, permitting the J&J lawsuit to proceed would jeopardies ongoing settlement negotiations. Previously, J&J shifted liability for the cases to LTL via a tricky legal strategy known as a Texas two-step. In a statement, Erik Haas, global vice president of litigation for J&J, referred to the decision as “a win for claimants” and expressed confidence that they would eventually accept the suggested settlement. Leigh O’Dell, one of the top plaintiffs’ attorneys in the cases that were merged in the federal court in New Jersey, claimed that postponing trials relieves pressure on J&J.
Kaplan dismissed the bankruptcy
LTL’s bankruptcy filing was declared unlawful in January by the 3rd U.S. Circuit Court of Appeals in Philadelphia. Earlier this month, Kaplan dismissed the bankruptcy, but roughly two hours later, LTL re-filed for Chapter 11 in his court. According to one of their attorneys in court on Tuesday, the talc plaintiffs who are opposed to J&J’s proposed settlement proposal will submit a move to dismiss the second bankruptcy application. They paint J&J’s activities as a misuse of the bankruptcy system by a $400 billion global behemoth that has little chance of running out of cash to recompense cancer patients.
Up to 80,000 claimants are in favour of the company’s settlement proposal
Jim Murdica, a J&J attorney in charge of settling talc lawsuits, stated in a deposition this weekend that up to 80,000 claimants are in favour of the company’s settlement proposal. This number is sufficient to reach the bankruptcy threshold, which calls for approval from 75% of all claimants, according to Mr. Murdica. The appeals court held that LTL’s termination of a finance arrangement with its parent business protected it from the kind of financial difficulties required to properly file for bankruptcy.
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