Johnson and Johnson’s first bankruptcy filing for its talc subsidiary, LTL, was dismissed, and their petition for rehearing en banc was denied by the appeals court. Despite this landmark ruling by the Third Circuit Court of Appeals, J&J’s is again seeking Chapter 11 bankruptcy for LTL. In J&J new bankruptcy filing, the company has proposed a settlement offer to pay $8.9 billion to talc victims. However, for this deal to become final, the court would have to first approve J&J’s second bankruptcy filing, then later rule on the settlement itself.
If J&J’s bankruptcy were to be approved by the court, the company would pay out the settlement amount over the course of 25 years through a bankruptcy trust. All current and future lawsuits would then be channeled to the trust, where each plaintiff would file a claim to be processed according to the bankruptcy plan.
For now, U.S. Bankruptcy Judge Michael Kaplan has granted a 60-day stay which halts pending litigation for talc lawsuits filed against J&J. The terms of this stay are narrower than J&J requested, as it still allows new lawsuits to be filed. This stay halted roughly 38,000 talc lawsuits consolidated in a federal district court in New Jersey, but allowed other cases to proceed as long as no trials commence. Judge Kaplan said he will revisit this ruling in May, but the stay is currently set to end on June 15.
Ultimately, the bankruptcy court will decide whether to approve or dismiss this new case and potential settlement, but in the meantime, Judge Kaplan has advised the parties to consider mediation to reach a settlement.
Shelby Roden filed one of the first federal talc lawsuits against J&J and will continue to monitor the ongoing litigation alleging claims related to ovarian cancer. If you or a family member have been diagnosed with ovarian cancer, please contact our office at 205-933-8383 for a free consultation.