U.S. Bankruptcy Court for the Western District of North Carolina, October 14, 2021
On October 14, 2021, LTL Management LLC, an indirect subsidiary of Johnson & Johnson, filed papers in connection with pursuing Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of North Carolina, Charlotte Division. According to its informational brief, LTL Management seeks to “resolve permanently all mass tort claims relating to its cosmetic talc products in a manner that is efficient and equitable to all parties, including current and future claims.” LTL stated that their predecessor, Johnson & Johnson Consumer Inc., has incurred almost $1 billion in cosmetic talc claim defense costs, as well as about $3.5 billion in payments in settlements and verdicts. They also set forth that J&J was subject to “extraordinary judgments,” pointing to a $4.69 billion verdict in Missouri state court, and noted that the status quo was “untenable.”
LTL further “seeks to confirm as promptly as possible a Chapter 11 plan of reorganization that establishes a trust to efficiently process and pay such claims.” Indeed, the funding agreement notes that Johnson & Johnson has committed $2 billion to a qualified settlement fund to pay cosmetic talc claims, which they believe “is substantially in excess of any liability the debtor should have.” As such, they argue that claimants cannot be prejudiced by the divisional merger. LTL also stated that they continue to “stand behind the safety of its cosmetic talc and does not believe the claims have merit.” The Asbestos Case Tracker will continue to monitor any forthcoming developments in this area.