Johnson & Johnson announced that its subsidiary LTL Management (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection to obtain approval of a reorganization plan that will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the company and its affiliates in North America.
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To that end, the company has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL’s initial bankruptcy filing in October 2021.
LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms.
Importantly, neither LTL’s original filing nor this re-filing is an admission of wrongdoing, nor an indication that the company has changed its longstanding position that its talcum powder products are safe.
Johnson & Johnson and its other affiliates did not file for bankruptcy protection and will continue to operate their businesses as usual.
Last year, the United States Bankruptcy Court for the District of New Jersey 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.”
On appellate review, the United States Court of Appeals for the Third Circuit agreed that bankruptcy is “an appropriate forum for a debtor to address mass tort liability.”
However, the Third Circuit also concluded that the support the company provided to LTL in advance of the filing required the dismissal of the original bankruptcy case. The refiled case addresses the Third Circuit’s concerns and relies on well-established legal precedent to obtain the equitable resolution available only in bankruptcy. ■
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