Johnson & Johnson wants to file for bankruptcy for the third time to escape consumer claims for damages
Johnson & Johnson is deciding to file for bankruptcy for the third time, in order to free itself from the billion-dollar lawsuits it should face in 2024 for the damage caused, over many years, by the asbestos contamination of its baby powder.
As we wrote some time ago, J&J has for years distributed talc which contained a certain percentage of asbestos , an extremely dangerous material. This happened from 1971 to 2000, and in the meantime the company has always denied this fact, despite being aware of it. The presence of asbestos has caused harm to a large number of consumers who are now suing the company, with a very good chance of winning.
J&J faces a multitude of allegations in the US, from Pennsylvania to California, between November and December 2024, some involving claims from more than half a dozen plaintiffs, according to their lawyers. Those trials were scheduled after a judge in July rejected J&J's request to use Chapter 11 and resolve all claims in a consolidated manner.
Since 2016, J&J has paid at least $2.5 billion in settlements in lawsuits linked to cancers caused by its talc, according to data compiled by Bloomberg. However, it is estimated that at least another 50 thousand consumers want to ask for compensation, so the overall figure risks being many billions to pay.
“With all those lawsuits in front of them, the administrators obviously want the bankruptcy reopened,” said Carl Tobias, a University of Richmond professor who teaches on mass torts and has followed the talcum powder cases. “They are playing to buy time and avoid shelling out hundreds of millions of dollars on lawyers to defend all those lawsuits.”
Another bankruptcy filing by J&J's LTL Management subsidiary would give the company the opportunity to ask a judge to put all trials on hold while the company once again negotiates with lawyers representing the victims. The judges did so in the first two Chapter 11 filings by the LTL unit, but those cases were dismissed.
Erik Haas, J&J's in-house attorney in charge of litigation, said on an earnings call earlier this month that the world's largest maker of health products is mulling another Chapter 11 filing by a unit in hope to revive its $8.9 billion settlement agreement.
The company wants bankruptcy in order to reach an overall agreement on all current and future compensation, re-proposing the offer already made of almost 9 billion dollars. Obviously the consumers in question, 51 thousand, would instead like the company to respond fully to their requests for compensation. The judge will decide who is right.
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The article Johnson & Johnson wants to file for bankruptcy for the third time to escape consumer claims for damages comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/johnson-johnson-vuole-chiedere-per-la-terza-volta-la-bancarotta-per-sfuggire-alle-richieste-di-danni-dei-consumatori/ on Sat, 28 Oct 2023 05:30:56 +0000.