In a stunning, but not unexpected move, Johnson & Johnson has filed for Chapter 11 bankruptcy for a second time. Once again, this will halt the progress of over 60,000 pending talcum powder lawsuits. This development comes only about two months after the U.S. Third Circuit Court of Appeals rejected J&J’s 2021 attempt to file for bankruptcy with its subsidiary company, LTL Management.
The first time J&J tried to file for bankruptcy, it planned to propose a $2 billion settlement trust to handle all of its talcum powder lawsuits at once. This time, J&J is offering $8.9 billion to resolve all current and future talcum powder claims. By offering a larger settlement amount, Johnson & Johnson hopes to avoid further accusations of bad faith that previously led the Third Circuit Court to reject its bankruptcy case.
According to J&J, this proposed $8.9 billion settlement isn’t considered to be an admission of liability or wrongdoing. As it did before, the company staunchly maintains that its talc products are safe and do not cause cancer. J&J has even accused plaintiffs’ lawyers of seeking substantial payouts by offering talcum powder lawsuits for their potential clients.
Johnson & Johnson appears hopeful about its new bankruptcy attempt, stating that the 60,000 plaintiffs in the lawsuit have agreed to support the proposed $8.9 billion settlement. However, the prior ruling by the Third Circuit Court of Appeals casts doubt on whether J&J’s bankruptcy filing will succeed this time.
J&J’s first bankruptcy attempt
The appeals court previously dismissed J&J’s initial bankruptcy case because neither J&J nor LTL Management demonstrated legitimate financial distress as required to benefit from bankruptcy protection. While J&J may be attempting to exhibit good faith through its revised settlement offer, the Third Circuit’s previous decision was based specifically on facts around J&J’s financial stability. Unless those facts themselves change, the court’s decision seems unlikely to change, either.
Attorneys representing plaintiffs were also quick to criticize the $8.9 billion proposed settlement immediately after J&J filed its latest bankruptcy case. In public statements, the attorneys called the settlement amount “woefully inadequate” and asserted that it would fail to even cover most victims’ medical expenses and ongoing healthcare costs.
Though talcum powder lawsuits have been temporarily paused again, it won’t be long before the Third Circuit Court makes another decision about J&J’s bankruptcy attempts. If you or an immediate family member developed ovarian cancer after using Johnson & Johnson’s talcum powder, see if you qualify to receive compensation today.