The U.S. Trustee Program, a unit of the Division of Justice (DOJ) overseeing chapter instances, has filed a movement in federal chapter court docket in Houston to dismiss a Chapter 11 submitting by a subsidiary of Johnson & Johnson JNJ.
The filing goals to settle greater than 60,000 talc-related lawsuits, marking J&J’s third try and pursue this technique in as a few years.
In September, Johnson & Johnson reportedly elevated its settlement provide by $1 billion, now totaling about $9 billion, to handle claims that its talc child powder prompted gynecological most cancers.
The DOJ argues that Johnson & Johnson’s newest chapter maneuver is a bad-faith try and defend itself from billions in private damage claims with out truly getting into chapter.
The corporate’s strategy entails creating a brand new subsidiary, transferring billions in liabilities however few belongings to this entity, after which submitting for chapter on its behalf.
This transfer is seen as a approach for Johnson & Johnson to safe a third-party launch that might discharge each itself and the subsidiary from legal responsibility—an motion that was expressly prohibited in a current Supreme Courtroom ruling.
Johnson & Johnson has used related techniques up to now, each dismissed on account of findings of unhealthy religion.
Regardless of these setbacks, the corporate has filed this new case beneath a distinct entity and jurisdiction, which the DOJ believes is an try and sidestep earlier rulings.
The trustee’s movement claims that the debtor in query has no legitimate motive for chapter safety and that the submitting serves no authentic restructuring goal.
The continuing litigation stems from quite a few claims that Johnson & Johnson’s talc-based merchandise, together with child powder, prompted private accidents.
Many lawsuits assert a hyperlink between talc publicity and ovarian most cancers, whereas others allege that the merchandise have been contaminated with asbestos, resulting in mesothelioma.
J&J has persistently denied these allegations.
As of October 2021, round 36,000 ovarian most cancers claims and 470 mesothelioma instances have been tied to Johnson & Johnson’s talc merchandise, with many instances consolidated in a multi-district litigation in New Jersey.
Value Motion: JNJ inventory closed 0.38% at $163.45 on Tuesday.
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