Johnson & Johnson Files for Bankruptcy Again Over Talcum Powder Claims

In a stunning, but not unexpected move, Johnson & Johnson has filed for Chapter 11 bankruptcy for a second time, once again halting the progress of its 60,000 pending talcum powder lawsuits. This development comes only about two months after the U.S. Third Circuit Court of Appeals rejected its 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 settlement trust to handle all of its talcum powder lawsuits at once, but an amount was never disclosed to the court. 

This time, Johnson & Johnson is offering an amount upfront for its proposed settlement: $8.9 billion to resolve all current and future talcum powder claims. By disclosing this settlement value ahead of time, the company hopes to avoid further accusations of bad faith that previously led the Third Circuit Court to reject the company’s bankruptcy case.  

According to J&J, this proposed $8.9 billion settlement is not considered to be an admission of any 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 newly filed bankruptcy case, stating that the plaintiffs in its remaining 60,000 lawsuits 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. 

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.