A consortium of law professors has entered the fray of Johnson & Johnson’s talc unit’s Chapter 11 case, issuing a resounding call for its dismissal. In an amicus brief filed on Friday, the scholars contend that the bankruptcy proceedings are a thinly veiled attempt to shield J&J’s assets from the mounting tide of tort claims stemming from alleged injuries caused by its talc products.
The brief, signed by seven distinguished professors, underscores the purported machinations behind LTL Management’s bankruptcy filing. The professors assert that the maneuver follows a dubious pattern of corporate transactions known as the “Texas two-step,” orchestrated with the sole aim of insulating J&J from its talc-related liabilities while preserving its lucrative consumer products business.
“This bankruptcy is a calculated ploy to circumvent accountability and deprive talc victims of their rightful day in court,” the brief vehemently contends. “By cloaking its assets within LTL, J&J is orchestrating a flagrant assault on the integrity of the Chapter 11 system.”
Central to the professors’ argument is the assertion that LTL’s bankruptcy serves J&J’s interests at the expense of genuine creditors. The move, they argue, represents a dangerous precedent that undermines the very essence of Chapter 11, which is designed to facilitate genuine reorganization efforts, not shield corporate behemoths from their legal obligations.
The amicus brief dovetails with two other filings from legal experts, all in support of a motion to dismiss the Chapter 11 case spearheaded by the official committee of tort claimants of LTL. This committee, representing over 38,000 talc victims, has decried the bankruptcy as an act of bad faith.
Echoing growing concerns within legal circles, the professors warn against allowing such strategic bankruptcies to become commonplace. “To permit LTL’s bankruptcy case to proceed unchecked would set a dangerous precedent, emboldening other companies to replicate this tactic and evade their liabilities,” the brief cautions.
The urgency of the matter is underscored by the imminent five-day trial slated to commence before U.S. Bankruptcy Judge Michael B. Kaplan in Trenton. Amidst mounting scrutiny, the legal battle promises to shape the contours of corporate accountability and the integrity of the bankruptcy system itself.
As the legal saga unfolds, the eyes of the legal community remain fixed on the unfolding proceedings, poised to witness a pivotal showdown between corporate interests and the quest for justice.
