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Facing Talcum Powder Lawsuits, Johnson & Johnson Considers Restructuring, Bankruptcy Filings

Riddle Brantley LLP   |  July 27, 2021   |  

Defendant Considers Bankruptcy Protections as It Faces Talcum Powder Lawsuits

Potential Johnson & Johnson Bankruptcy Protection from Talcum Powder Lawsuits - Riddle & BrantleyFacing potentially billions of dollars in settlements and verdicts in thousands of talcum powder lawsuits, Johnson & Johnson is considering options to “offload” liabilities, potentially including starting new talc-related business units that would then seek bankruptcy protections. First reported by Reuters, the bankruptcy maneuvering could potentially shield Johnson & Johnson from potentially significant financial consequences that may result from claims that the company’s talc-based products caused cancer.

Baby Powder Lawsuits Present Expensive Problem for Johnson & Johnson

In March 2021, Johnson & Johnson disclosed that it was setting aside $3.9 billion for potential settlements in talcum powder lawsuits. In mid-2021, the U.S. Supreme Court rejected the company’s appeal of a separate $2 billion verdict in a case involving 22 women who claimed that asbestos in Johnson & Johnson talcum powder caused their cancer.

As of mid-2021, Johnson & Johnson faces more than 25,000 lawsuits alleging that asbestos contamination in the company’s talc-based Baby Powder and Shower-to-Shower products caused ovarian cancer, endometrial ovarian cancer, and mesothelioma.

No Decision Made Yet

According to sources close to the discussions, Johnson & Johnson has not yet made a decision concerning the potential “offloading” and bankruptcy filings. Reuters reported that it could not determine whether the company has retained lawyers to assist in potential restructuring and bankruptcy filings.

Johnson & Johnson Denies Any Negligence or Wrongdoing

In a statement provided to Reuters by Johnson & Johnson Consumer Inc., the division responsible for the company’s talcum powder-based products, the company said that it “has not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate.”

The company refused to provide any further comment.

Could Johnson & Johnson Evade Any Potential Liabilities?

Talcum Powder Lawsuit Attorneys - Riddle & BrantleyIn the event that Johnson & Johnson faces serious financial liabilities stemming from thousands of talcum powder cancer lawsuits, the reorganization of subsidiaries and subsequent bankruptcy filings could potentially allow the company to escape certain financial obligations, although nothing is certain.

At issue is a kind of legal maneuver known as a “divisive merger” — legal in Texas — to effectively split a company into two entities. According to Reuters, “For J&J, that could create a new entity housing talc liabilities that would then file for bankruptcy to halt litigation.” 

The maneuver is known by legal experts as a “Texas two-step bankruptcy,” and it has been used by other talc-based product manufacturers to attempt to reduce liabilities in other related litigation.

Do You Have a Talcum Powder Cancer Claim?

If you’ve suffered from ovarian cancer, endometrial ovarian cancer, or mesothelioma after using Johnson & Johnson talc-based products such as Baby Powder or Shower-to-Shower, you may qualify for a talcum powder lawsuit and be entitled to compensation.

You may qualify for a talcum powder lawsuit if you meet the following criteria:

  • Must have used Johnson & Johnson Baby Powder or Shower-to-Shower talcum powder for 4+ years continuously in the general area
  • Must be diagnosed with ovarian cancer, mesothelioma, or endometrioid ovarian cancer
  • Must have been diagnosed in 2009 or later
  • Must have used talcum powder before menopause

Our experienced talcum powder attorneys are ready to evaluate your claim for free and advise you on your available legal options. For a FREE, no-obligation consultation, please call 1-800-525-7111 or complete the fast and easy form below.

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