The Johnson & Johnson subsidiary that faces thousands of lawsuits over talc products will face a bankruptcy judge on Tuesday for the first time since a U.S. appeals court rejected last month’s attempt to company to transfer the case to judicial recovery procedures.
A three-judge panel of the Philadelphia-based US Court of Appeals for the 3rd Circuit ruled on January 30 that the J&J subsidiary’s bankruptcy filing should be dismissed, concluding that the company had no legitimate right to protection. against creditors because it does not face financial difficulties.
If the ruling is not reversed, J&J will be forced to go back to court to face some 40,000 lawsuits alleging that the company’s baby powder and other cosmetic products containing talc cause cancer.
J&J claims its baby powder products are safe.
US judge Michael Kaplan was chosen to preside over the hearing of the subsidiary, called LTL Management. J&J declined to comment.
The LTL on Monday asked the 3rd Circuit to reconsider the three-judge panel’s decision.
LTL’s bankruptcy filing has put the thousands of cases against the company on hold.
At least one of the plaintiffs has asked the judge hearing LTL’s request to allow their case to proceed in California after the 3rd Circuit decision, a request that is expected to be heard at Tuesday’s hearing. LTL objects to the request.
The 3rd Circuit ruling cast doubt on the effectiveness of J&J’s use of a legal maneuver known as the “two steps from Texas,” named after U.S. state law that the company used to split its consumer businesses into two parts. new subsidiaries.
With this division, in October 2021, J&J discharged the wave of processes related to talc products in the new unit created, LTL, which then filed for judicial recovery.
J&J, which has a market value of more than $400 billion, argues that the flood of lawsuits poses a serious financial threat to the group.
The company’s costs of verdicts, settlements and legal fees have risen to about $4.5 billion, with no end in sight, according to bankruptcy court documents.
Source: CNN Brasil
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