New York ,
And United States Court of Appeals fired one bankruptcy protection applicationOne who presented a unit Johnson & Johnsonn, something that jeopardizes the healthcare company’s effort to settle billion-dollar legal claims Customers who claim their talc causes cancer.
US Court of Appeals for the Third Circuit rejects bankruptcy petition of subsidiary J&J, LTL management, something that saves you from having to move thousands of cases from the courts to the bankruptcy system.
J&J Used a “Texas two-step” legal maneuver to split the company into two separate businesses before declaring bankruptcy for one of them, which is facing more than 40,000 cancer lawsuits. The company indicated that it could achieve a more “efficient” and “equitable” resolution of claims.
But the court ruled that only companies facing financial stress can resort to bankruptcy to help them reorganize. “Although LTL faces significant talc liabilities in the future, its financial support mitigates any financial hardship,” the ruling said.
J&J Logicor before the court that their use of the bankruptcy system did not attempt to reduce the size of the awards affected by cancer and agreed to finance LTL’s talc liabilities up to a value of $61 billion.
However, in a 56-page opinion, Judge Thomas Embro stated that the desire to protect a trademark J&J or “to fully resolve the dispute” is not a sufficient excuse for resorting to the bankruptcy system. “Only a creditworthy debtor can do this in a financial crisis. LTL was not.”
actions of J&JWhich has a market value of more than $425 billion, fell 3 percent after the ruling, while 3M, which is following a similar strategy to resolve litigation over its earplugs, lost 1.5 percent.
verdict means J&J LTL risks being forced to fight the talc plaintiffs in civil court, a process that could take decades and cost the company hundreds of billions of dollars, according to legal filings.
In 2018, a Missouri jury ordered J&J A group of about two dozen women will have to pay nearly $4.7 billion in damages who claimed their cancer was caused by its talc. The payments were later appealed and cut in half, but the company still owed more than $2 billion in damages.
Legal experts say the verdict could set a precedent and deter companies from resorting to the complex bankruptcy system to deal with massive claims for damages. A US unit of 3M, Georgia-Pacific, a Koch Industries subsidiary, Trane Technologies and France’s Saint-Gobain have implemented similar strategies in recent years.
University of Richmond law professor Carl Tobias said: “The only possibility J&J has is an appeal to the Supreme Court, which grants review on a minuscule percentage of appeals.”
He said Jammu and Kashmir would appeal against the verdict.
“It is in the best interests of Plaintiffs and all interested parties to resolve this matter as quickly and efficiently as possible,” J&J said. “We continue to support the safety of Johnson’s Baby Powder, which is safe, does not contain asbestos and does not cause cancer.”
The plaintiffs allege that J&J’s baby powder contained traces of asbestos that caused cancer and that the company lied about the product’s safety.
J&J has stopped selling its baby powder in the US and Canada and will stop selling it worldwide this year.
Lawyers for the plaintiffs who alleged that talc caused their cancer welcomed the decision.
“The decision rejects J&J’s attempt to subvert the bankruptcy system and tramples on the constitutional right to a jury trial of all Americans injured by deadly products,” said trial attorney John Ruckdeshall, who served for more than 20 years. . Mesothelioma sufferers.
“Bankruptcy courts are for honest companies in financial trouble, not multi-billion dollar megacorporations like J&J, 3M and Coach Industries who want to close the court doors to their victims.”
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