Equitable & Efficient Resolution of All Current and Future Talc Claims
LTL Management LLC (“LTL”), a subsidiary of Johnson & Johnson (the “Company”) responsible for holding and managing all liabilities related to Johnson & Johnson’s talc litigation, is pursuing a resolution of all talc legal claims through Chapter 11 bankruptcy.
Under the reorganization plan LTL is pursuing, which will be voted on by claimants, all qualifying current and future cosmetic talc claims will be compensated.
This site is designed to provide more detailed information and background on LTL’s Chapter 11 proceedings, including third-party resources and legal filings related to the Chapter 11 case.
Current Status
On July 28, 2023, the U.S. Bankruptcy Court for the District of New Jersey granted the plaintiffs’ motion to dismiss LTL’s refiled bankruptcy case. This was not a ruling on the merits of the cosmetic talc claims, but rather on whether LTL’s case can move forward in the bankruptcy court. LTL will appeal the ruling.
Previously, on April 4, 2023, LTL re-filed for voluntary Chapter 11 bankruptcy protection to obtain approval of a reorganization plan that would equitably and efficiently resolve all claims arising from cosmetic talc litigation against the Company and its affiliates in North America. The refiled case addressed concerns cited by the Court of Appeals for the Third Circuit in its January 2023 ruling.
LTL commenced its bankruptcy case in good faith and in strict compliance with the Bankruptcy Code. The reorganization plan that LTL proposed with its filing committed an unprecedented $8.9 billion settlement to resolve all talc claims and is supported by counsel representing approximately 60,000 claimants. LTL continues to believe that its reorganization plan, which affords timely compensation for all claimants, offers the most equitable resolution to talc claimants and LTL will continue to work with counsel towards a full and fair resolution of the talc claims.
In the event LTL does not prevail in the appeal, it is prepared to return to the tort system and vigorously defend itself in talc-related cases. In addition, the Company has brought legal actions to address abuses by the plaintiffs’ bar that gave rise to these meritless claims.
Background
In October 2021, LTL filed for Chapter 11 bankruptcy to efficiently resolve claims in the cosmetic talc litigation in a manner that is equitable to all parties, including current and future claimants. Plaintiff lawyers challenged the filing with motions to dismiss the bankruptcy.
In February 2022, the Bankruptcy Court ruled that LTL commenced its initial bankruptcy case in good faith, expressing the “strong conviction that the bankruptcy court is the optimal venue for redressing the harms of both present and future talc claimants in this case – ensuring a meaningful, timely, and equitable recovery.” Plaintiff lawyers appealed this ruling to the United States Court of Appeals for the Third Circuit.
In January 2023, LTL’s bankruptcy was dismissed by a three-judge panel of the Third Circuit Court of Appeals. The Third Circuit agreed that bankruptcy is “an appropriate forum for a debtor to address mass tort liability,” but it dismissed the case on other legal grounds.
The Chapter 11 Process
Chapter 11 is a well-established legal process in the United States that allows a company to complete a financial or operational restructuring under the supervision of the Bankruptcy Court.
As part of the process, companies must file a Plan of Reorganization, which outlines how money that is determined to be owed to various people or organizations will be paid.
The Plan of Reorganization must be approved by a majority vote of eligible claimants and the Bankruptcy Court. This process results in a Plan of Reorganization that is fair and equitable for all stakeholders.
Why Chapter 11 Is the Best Path to Resolve the Talc Litigation
The Chapter 11 process provides a single venue for all parties to participate in the resolution process, resulting in a comprehensive, fair and efficient settlement agreement that cannot be achieved through individual jury trials.
While LTL is prepared to try every case, addressing each and every one of the talc cases on an individual basis could take decades. Even then, there is no known, definitive outcome or guarantee that all cases would reach resolution. The United States tort system is not equipped to resolve thousands of cases quickly or efficiently.
The Chapter 11 process brings everyone to the table to negotiate an agreement, provides for the quickest and most efficient resolution for people who have legal claims related to talc and provides certainty for all parties.
Importantly, Chapter 11 allows people who may make a legal claim related to talcum powder in the future to participate in the resolution through an independent representative, called a “Future Claims Representative,” appointed by the Bankruptcy Court. That Court-appointed agent assesses the number of future claims and the total amount of fair compensation and determines how compensation should be distributed.
In his review of LTL’s Chapter 11 filing, Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey wrote the following:
“While this Court recognizes and appreciates the passion and commitment of the Committee members and every one of the attorneys advocating for the interests of the injured cosmetic talc claimants in this case, the Court simply cannot accept the premise that continued litigation in state and federal courts serves best the interest of their constituency. Many of these cases, both in the United States and abroad, have been pending for a half dozen or more years and remain years away from trial dates, not to mention the substantial delays they face in the inevitable appeals process. Notably, since 2014, there have been only 49 trials that have proceeded to verdict.”
- Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey in Memorandum Opinion, Case 21-03032-MBK, Doc 184 (2/25/22)
LTL’s legal proceedings are not an admission of wrongdoing. Decades of independent scientific testing have confirmed that Johnson & Johnson’s talc-based products are safe, do not contain asbestos and do not cause cancer. The Company does not believe that any of the talc-related claims against it has merit, nor does it believe its products are responsible for any illness. However, Johnson & Johnson and LTL believe that resolving this litigation as quickly and efficiently as possible is in the best interests of claimants and all stakeholders.
For more information on the safety of Johnson & Johnson’s cosmetic talc, please visit www.FactsAboutTalc.com.
Johnson & Johnson and its other affiliates did not file for bankruptcy protection and continue to operate their businesses as usual.