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Chapter 11 Dismissal Trial Key in J&J Talc Case
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Chapter 11 Dismissal Trial Key in J&J Talc Case

chapter 11 dismissal

In a significant development in the Chapter 11 case of Johnson & Johnson’s bankrupt talc unit, a New Jersey bankruptcy judge opted to defer several critical rulings on Tuesday. The judge emphasized that an impending trial concerning multiple motions to dismiss the proceedings would serve as a pivotal factor influencing subsequent decisions.

During a hybrid hearing held in Trenton, U.S. Bankruptcy Judge Michael B. Kaplan said he would not make a decision yet on the motion of the official committee of talc claimants to terminate the period during which debtor LTL Management LLC has the exclusive right to propose a Chapter 11 plan.

“I think the motion to dismiss is a gating process but it’s also going to help inform the court as to a host of the issues that have been touched on concerning the debtor’s motivation, its plan process, its ability to identify claimants, and the number of claimants,”.

Judge Kaplan

The judge scheduled a further hearing on the exclusivity termination motion for Aug. 2, aligning it with the date pledged for issuing rulings on ten pending motions to dismiss the bankruptcy case for the second time. This decision follows the overturning of motions to dismiss LTL’s initial Chapter 11 case by the Third Circuit in January, with the cases being effectively dismissed in April.

LTL swiftly filed for Chapter 11 once again, this time accompanied by a proposal to establish an $8.9 billion settlement fund to compensate talc injury claimants. With a Chapter 11 plan and disclosure statement submitted last month, LTL sought a hearing date for the court’s consideration of the disclosure statement to initiate creditor voting.

Citing the imminent dismissal trial scheduled for later in the month, Judge Kaplan tentatively set Aug. 22 for the hearing, ensuring adequate time for a decision on the dismissal motions. Additionally, the court extended the preliminary injunction, originally entered in April, until Aug. 22, enabling the inclusion of evidence and testimony crucial for the dismissal trial.

The trial on the dismissal motions is slated to commence on June 27, extending for at least four trial days.

LTL’s Chapter 11 filing in early April came shortly after the Third Circuit’s directive to dismiss the earlier bankruptcy case, citing the debtor’s purported lack of financial distress and good faith status. Originating in October 2021, the debtor’s creation preceded its initial Chapter 11 filing in North Carolina bankruptcy court, addressing myriad claims stemming from exposure to J&J’s talc products allegedly containing asbestos.

John Edwards

Reading Time: 1 mins

Published On: June 8, 2023

John Edwards - author

John 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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