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Bankrupt Johnson & Johnson Talc Unit Defends Chapter 11 Move Amid Controversy

talc court hearing

Amidst mounting controversy, the bankrupt Johnson & Johnson talc unit, LTL Management LLC, vehemently defended its Chapter 11 filing, asserting that bankruptcy represents the most efficient recourse to address the staggering onslaught of 38,000 talc claims. The retort, filed in response to motions seeking dismissal, underscores the intensifying battle over the company’s alleged exploitation of the bankruptcy system to evade liability.

In a late Wednesday filing, LTL rebuffed accusations of bad faith in its bankruptcy petition, citing the overwhelming deluge of talc claims that rendered traditional litigation untenable. With billions of dollars in defense costs, verdicts, and settlements looming, the company contends that the Chapter 11 reorganization is a necessary bulwark against financial ruin.

“The old company faced an insurmountable tide of talc claims, with no conceivable means to navigate them,” the filing stated emphatically. “Bankruptcy provides the only viable path to safeguarding the interests of all stakeholders.”

Contrary to claims of subterfuge, LTL asserted that the bankruptcy process offers a more equitable and efficient mechanism to adjudicate claims, curbing exorbitant legal fees and ensuring equitable outcomes for all parties involved. Emphasizing the imperative of maximizing creditor value, the company portrayed Chapter 11 as a shield against the perils of protracted litigation.

The rebuttal follows scathing criticisms leveled during a Senate Judiciary Committee subcommittee hearing earlier in the week, where experts and consumer advocates lambasted Johnson & Johnson’s alleged exploitation of the “Texas two-step” maneuver to insulate itself from ovarian cancer and mesothelioma claims. In a strategic move last October, the conglomerate executed the divisive merger in Texas, culminating in LTL’s bankruptcy filing in North Carolina.

Amidst a flurry of legal maneuvers, Johnson & Johnson recently abandoned efforts to stifle media scrutiny over its purported bankruptcy plans, lending credence to allegations of premeditated corporate machinations.

As the contentious saga unfolds, all eyes now turn to the impending hearing before U.S. Bankruptcy Judge Michael B. Kaplan, poised to adjudicate the fate of LTL Management LLC in the crucible of judicial scrutiny.

Johnathan Edwards

Reading Time: 1 mins

Published On: February 11, 2022

Johnathan Edwards - author

Johnathan Edwards Is a husband, father, veteran and medical writer, from the state of California. After serving 9 years in the U.S Army Medical Department, John cultivated his passion for serving his country and helping people. He often volunteers with helping to rehabilitate veterans of all ages. After John’s father was diagnosed with Mesothelioma, he began to research, write and fight for ways to help other victims of asbestos exposure.

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