Johnson & Johnson looking to bankruptcy to resolve 40,000 baby powder cancer suits

[goatmane]

Johnson & Johnson looking to bankruptcy to resolve 40,000 baby powder cancer suits

The company is looking to resolve the cases in bankruptcy court.

Johnson & Johnson looking to bankruptcy to resolve 40,000 baby powder cancer suits


ByAaron Katersky
October 20, 2021, 9:46 AM
• 3 min read

MORE: Johnson & Johnson asks high court to void $2B talc verdict
The company has denied its signature Johnson’s Baby Powder and other talc-based products contained asbestos and caused cancer, as alleged by tens of thousands of plaintiffs. J&J has spent nearly $1 billion defending itself, according to a court filing.

“Debtor continues to stand behind the safety of its cosmetic talc and does not believe the claims have merit,” J&J said in a court filing. “The unfortunate reality is that this filing is necessitated by an unrelenting assault by the plaintiff trial bar, premised on the false allegations that the Debtor's 100+ year old talc products contain asbestos and cause cancer.”

The company stopped selling Baby Powder in the United States and Canada in May 2020.

“Johnson's Baby Powder has been a staple for hundreds of millions of people for over 125 years. If claimants' allegations were correct that the product causes disease, there should have been long ago an epidemic clearly attributed to the use of the product. That is not the case,” the filing said.

Johnson & Johnson has put $2 billion into a settlement fund to pay the talc claims even though the company said “$2 billion is substantially in excess of any liability the Debtor should have.”

Johnson & Johnson said it sold $502 million of its Covid-19 vaccine in the third quarter, in its earnings report Tuesday that beat Wall Street’s profit expectations.

Here’s how J&J did compared with what Wall Street expected, according to average estimates compiled by Refinitiv:

• Adjusted EPS: $2.60 per share vs $2.35 expected.
• Revenue: $23.34 billion vs $23.72 billion expected.

J&J increased its full-year earnings guidance to between $9.77 per share and $9.82 per share, from its previous estimates of $9.60 to $9.70 per share. It expects sales to range from $94.1 billion to $94.6 billion, up from previous guidance of $93.8 billion to $94.6 billion.

At the same time, the company maintained its Covid vaccine sales outlook for the year at $2.5 billion.

Shares of J&J jumped more than 2% in early trading.

The company’s better-than-expected profit was bolstered by higher sales in its consumer health, pharmaceutical and medical devices units.

Its consumer unit, which makes products such as Neutrogena face wash and Listerine, generated $3.7 billion in revenue, up 5.3% from a year earlier.


J&J’s pharmaceutical business, which developed the single-shot Covid vaccine, generated $12.9 billion in revenue, a 13.8% year-over-year increase.

Its medical device unit generated $6.6 billion, an 8% rise. That unit was hit hard last year as the coronavirus pandemic forced hospitals to postpone elective surgeries and Americans stayed home.

 

[humminbird]

take their vaccine off the market too

 

[The Minister Of Culture]

Change their name to Poison & Poison while we at it

 

[Seoul Gleou]

take their vaccine off the market too

yeah. shyt's trash

bush the whole company

 

[Prince.Skeletor]

This is why i didn’t take the Johnson & Johnson vax, same with Pfizer!

 

[Strapped]

Let them fail

 

[Born Rich]

U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits

U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits​

Jan 30 (Reuters) - A U.S. appeals court upended Johnson & Johnson's (JNJ.N)attempt to offload into bankruptcy tens of thousands of lawsuits over its talc products, ruling the healthcare conglomerate improperly placed a subsidiary into Chapter 11 proceedings even though it did not face financial distress.

The decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia on Monday dismissed a Chapter 11 petition filed by a recently created J&J subsidiary in October to address more than 38,000 lawsuits from plaintiffs alleging the company’s baby powder and other talc products caused cancer.

Before the bankruptcy, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were eventually awarded a judgment of more than $2 billion, according to bankruptcy-court records.

Several major companies, including J&J and 3M Co (MMM.N), have turned to bankruptcy court to manage their mass tort liabilities. Plaintiff attorneys have called the cases an improper manipulation of the bankruptcy system, while the companies say the Chapter 11 filings are aimed at compensating claimants fairly and equitably.

J&J’s maneuver is known as a Texas two-step for a state law used to create a subsidiary that shoulders litigation and then declares bankruptcy. The Third Circuit’s opinion allows talc litigation to resume against the company.

J&J said it would challenge the ruling and that its talc products are safe.

Its shares fell more than 3% - the biggest one-day percentage decline in two years.

The New Jersey-based company, valued at more than $400 billion, said its subsidiary’s bankruptcy was initiated in good faith and designed to equitably resolve talc claims for the benefit of all plaintiffs. J&J initially pledged $2 billion to the subsidiary to resolve talc claims and entered into an agreement to fund an eventual settlement approved by a bankruptcy judge.

A three-judge panel on the appeals court rejected J&J’s argument, finding the company’s subsidiary, LTL Management, was created solely to access the bankruptcy system and not because it faced financial distress.
"Good intentions - such as to protect the J&J brand or comprehensively resolve litigation - do not suffice alone," the judges said in a 56-page opinion.
The decision throws into doubt J&J’s long-planned strategy for disposing of talc litigation after it lost a bid to reverse a watershed verdict that eventually awarded more than $2 billion to 22 women who blamed their ovarian cancer on baby powder and other talc products.
More than 1,500 talc lawsuits have been dismissed without J&J having to pay anything, and the majority of cases that have gone to trial have resulted in defense verdicts, mistrials or judgments for the company on appeal, according to the J&J subsidiary's court filings.

'PROJECT PLATO'​

A December 2018 Reuters investigation revealed that the company knew for decades of tests showing its talc sometimes contained traces of carcinogenic asbestos but kept that information from regulators and the public.

“As we have said from the beginning of this process, resolving this matter as quickly and efficiently as possible is in the best interests of claimants and all stakeholders,” J&J said in a statement. “We continue to stand behind the safety of Johnson’s Baby Powder, which is safe, does not contain asbestos and does not cause cancer.”

Facing unrelenting litigation, J&J enlisted law firm Jones Day, which had helped other companies execute Texas two-step bankruptcies to address asbestos lawsuits.

J&J’s effort, which Reuters detailed last year, was internally dubbed “Project Plato”, and employees working on it signed confidentiality agreements warning them to tell no one, including their spouses, about the plan.

The Texas two-step strategy has garnered criticism from Democratic lawmakers, and inspired legislation that would severely restrict the practice.
Jones Day did not immediately respond to a request for comment.

Critics contend the strategy is an improper use of the bankruptcy system by solvent corporations wishing to escape jury trials in state courts. Bankruptcy filings typically pause litigation, forcing plaintiffs into often time consuming settlement negotiations while leaving them unable to pursue their cases in the courts where they originally sued.

“Bankruptcy courts are for honest companies in financial distress, not billionaire mega-corporations like J&J,” said Jon Ruckdeschel, a lawyer representing talc plaintiffs.

Plaintiffs and other legal experts urged U.S. Bankruptcy Judge Michael Kaplan last year to dismiss the J&J subsidiary’s bankruptcy, arguing it was filed in bad faith and risked becoming a blueprint for large corporations seeking to avoid undesirable litigation.
Kaplan, though, denied the request, finding the J&J unit did face financial distress and that a bankruptcy court was a better forum for resolving the litigation then America’s tort system.

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