Johnson & Johnson has proposed another bankruptcy plan that would settle tens of thousands of talc lawsuits for about $6.5 billion.
Faced with mounting allegations its talc products caused cancer, J&J controversially spun its talc liabilities into a separate company called LTL Management in 2021. Now called LLT, the company has twice unsuccessfully sought to settle the cases through bankruptcy. But this time, the company is asking ovarian cancer claimants to vote in support of the plan before it files for Chapter 11.
“We have the significant support of the overwhelming majority of the claimants based upon our communications with their counsels and representation,” Erik Haas, J&J’s worldwide VP of litigation, said on a Wednesday call with investors. “We firmly believe this plan is in the best interest of claimants and should receive a favorable vote and immediate confirmation from the bankruptcy court.”
J&J said its last bankruptcy filing had the support of more than 60,000 claimants, but a New Jersey federal judge dismissed the case and noted a lack of evidence of “imminent and immediate financial distress.”
This time, LLT is only looking to resolve ovarian cancer claims. Haas told investors Wednesday that J&J has resolved state consumer protection claims and most other claims made by mesothelioma claimants. That leaves between 85,000 and 100,000 ovarian cancer claims.
A small number of mesothelioma claims — Haas said the number is in the hundreds — are being addressed outside of the bankruptcy plan.
The process will now involve a three-month solicitation period during which ovarian cancer claimants will be asked to vote on the plan. If 75% or more of claimants give their support, LLT will file a “consensual prepackaged” Chapter 11 bankruptcy.
The proposal comes as J&J appeals the dismissal of its last bankruptcy plan and continues to fight multidistrict talc litigation. Last month, a New Jersey federal judge allowed J&J to bring new challenges to plaintiffs’ evidence in the multidistrict case, due to the “emergence of new relevant science” and changes to a federal rule governing expert testimony.
“At the rate at which these cases have been tried, it would take decades to try the remaining cases, meaning most claimants will never see their day in court,” Haas said of ovarian cancer claimants Wednesday.
Attorneys representing talc claimants attacked the proposal on Wednesday, arguing in a news release that it would “cheat victims legitimately harmed by talc.”
“These ongoing legal machinations have not and will not cause lawyers to lose their resolve and accept less than fair and reasonable offers. It is clear by these recent filings that J&J will stop at nothing,” Michelle Parfitt, co-lead counsel for plaintiffs in the multidistrict litigation, said in the release.
Mike Papantonio, who represents around 1,000 ovarian cancer claimants, told Endpoints News that J&J has “all kinds of ways to pay their way out of this.”
“They’ve worn out their arguments. So their attempt now is to say, ‘Well, let’s just scare the bejesus out of clients,” Papantonio said.