The official committee of talc claimants asked a New Jersey bankruptcy judge to dismiss Johnson & Johnson's (J&J) Chapter 11 case by stating that the proceeding is fake and designed to protect the company from huge penalties.
The motion argues that Johnson & Johnson executed a divisive merger transaction known as a "Texas two-step" that is solely designed to create LTL Management LLC and will prevent J&J from additional liabilities in the talc lawsuits.
Within two days of LTL Management LLC's formation, it filed for Chapter 11. The company's headquarters is located in New Jersey, hence in mid-November, the case was transferred in the state to be closer to the company's headquarters and employees. The federal multidistrict litigation of talc products is also pending in the state.
The committee even explained that J&J has misused the bankruptcy process to get rid of the liabilities. A hearing to dismiss the motion is scheduled for Feb. 15, 2022.
Currently, J&J faces more than 38,000 lawsuits of individual claims with allegations that exposure to the company's talc products caused ovarian cancer and mesothelioma due to the presence of asbestos in them.
Till now, J&J has spent around $1 billion for defending nearly 40,000 talcum powder claims. The company even spent $3.5 billion to deal with the claimants in verdicts and settlements.
