Johnson & Johnson announced Thursday that a subsidiary it recently formed to handle claims that its talcum products cause cancer has filed for bankruptcy.
The company said in a statement that it hopes its filing for Chapter 11 protection will help resolve current and future claims “in a manner that is fair to all parties.”
NOT A WORD. said he would provide money to the subsidiary for any amounts the bankruptcy court decides were owed, and that he would create a $ 2 billion trust for that reason. Some royalty income streams have been allocated to the subsidiary to pay for any future costs, he added.
Andy Birchfield, an attorney for the Beasley Allen law firm who has worked on litigation against Johnson & Johnson, said in a statement that the company’s filing was an “attempt to hide behind bankruptcy.”
âIt stinks,â he said. âJ. & J. Can run, but he can’t hide.
Mr Birchfield compared the filing to similar moves by Boy Scouts of America and USA Gymnastics, which also filed for bankruptcy this year as they faced legal action.
âHere is another example of the rich and powerful using bankruptcy as a hiding place to protect their profits and avoid liability,â he said. “The entire nation, Congress and over 30,000 victims of J. & J .’s dangerous talc product are saying ‘no’ to this blatant and fraudulent abuse of the bankruptcy system.”
Michael Ullmann, executive vice president and general counsel for Johnson & Johnson, said the company continued to “stand firm on the safety of our talc-based cosmetics“.
“We are taking these steps to bring certainty to all parties involved in the cosmetic talc business,” he said in a statement.
The move is the latest twist in the saga of the company’s talc-based products, including its iconic baby powder. Johnson & Johnson halted its North American sales of the product last year, as the company faces thousands of lawsuits from customers who claim its products cause cancer.
The subsidiary, LTL Management, will now bear the brunt of the claims, the company said. Johnson & Johnson itself and its other affiliates have not filed for bankruptcy and “will continue to operate as usual,” he said.
John Kim, LTL’s general counsel, said in a statement that with the financial support of the parent company, the subsidiary was “confident that all parties will be treated fairly in this process.”
Johnson & Johnson said its filing was “not a concession of liability but rather a means of achieving a fair and effective resolution of the claims raised in the cosmetic talc dispute.”
Although it has prevailed in some cases, the company has suffered significant losses in court compared to other claims. In June, a Missouri appeals court ordered the company to pay $ 2.1 billion in damages to women who said the company’s talc products, including its powder for baby, had caused their ovarian cancer.
In 2018, Johnson & Johnson was ordered to pay $ 4.69 billion to 22 women and their families, who said they developed ovarian cancer from the asbestos in talcum powder products the company.