Talc Trials Move Forward Despite J&J Bankruptcy Threat
A Delaware bankruptcy judge has opened a door for Johnson & Johnson to attempt to take advantage of a bankruptcy loophole to delay compensation to tens of thousands of victims with talc-related ovarian cancer and mesothelioma. The ruling is disappointing but it is not the end of the road in the fight for justice.
Internal J&J documents revealed in recent trials show that the company knew for decades that their Johnson’s Baby Powder and Shower to Shower talc-based powders caused cancer, and that they went to great efforts to hide that fact from consumers.
The request for a temporary injunction in Delaware was one of several moves by victims’ attorneys and lawmakers to stop solvent companies like Johnson & from misusing and manipulating bankruptcy laws to avoid liability for their misdeeds.
OnderLaw attorney James G. Onder said, “This is a needless delay for justice. So many of the victims we represent have suffered for years while J&J has manipulated our legal system. We will not be surprised if they do file a Texas Two-Step bankruptcy, but we will be disappointed, as we have been all along, that this company would continue to stoop so low in putting profit over people’s lives.”
Johnson & Johnson has not denied multiple reports that they are considering filing a Texas Two-Step bankruptcy, which involves moving its liabilities from talc-related lawsuits into a newly created business based in Texas. They would then move that entity to North Carolina, where they would file bankruptcy and essentially put a cap on their financial responsibility to the victims they have harmed.
A petition for a restraining order was filed on behalf of claimants in the Imerys bankruptcy court, including talc-related ovarian cancer victims, to stop J&J from transferring of assets. Imerys mined and sold talc to Johnson & Johnson for decades, but after mounting pressure from thousands of lawsuits, Imerys filed for bankruptcy protection of its North America holdings.
Johnson & Johnson continues to battle Imerys over legal costs. If J&J reorganizes their liabilities, the Imerys bankruptcy will be further delayed. That is why the Imerys claimants’ committee filed for a preliminary injunction to stop J&J to prevent the transfer of assets in prelude to bankruptcy.
The judge ruled that it would be improper as part of Imerys’ bankruptcy case for her to legally bar J&J from undertaking a “hypothetical future restructuring.” She said Imerys could take legal action against J&J should they go through with their filing.
A separate request for temporary injunction has been filed by Onder and fellow OnderLaw attorney Wylie Blair in Missouri. Unlike the bankruptcy filing, the Missouri petition is not affiliated with the Imerys talc bankruptcy. Plaintiffs claim that, should Johnson & Johnson file a Texas Two-Step bankruptcy, they would be in violation of Missouri’s Fraudulent Transfers Act. We are hopeful that a City of St. Louis Circuit Court is able to rule on the issue in coming months.
OnderLaw represents over 20,000 women with talc-related cancers. The attorneys are ready for all possible scenarios.
“For months now, we have been preparing for the possibility that Johnson & Johnson may file a Texas Two-Step bankruptcy,” said Blair. “As unethical as it sounds, it would unfortunately be in line with so many unscrupulous moves J&J has made all along. We are continuing to fight to hold Johnson & Johnson accountable and will exhaust any and all options to make sure their victims are compensated.”
Talc cancer trials faced nearly 18 months of delays due to Covid 19-related restrictions, but are set to resume in St. Louis September 7. In the most recent blow to Johnson & Johnson, the U.S. Supreme Court allowed a $2.1 billion ruling against the company to stand.
“Every time J&J appears in court, the stakes become higher,” said Onder. “We will continue to stand with our clients and put pressure on them until justice is served.”