A New Jersey judge refused to prevent Johnson & Johnson from separating injury liabilities linked to its talcum-based baby powder from the rest of its business, the second time ovarian cancer claimants have failed to stop J&J from potentially placing thousands of talc-related claims in chapter 11 bankruptcy, WSJPro reported. Judge John C. Porto of the Superior Court of New Jersey declined on Monday to prohibit J&J from separating talc liabilities from its corporate assets, saying he couldn’t designate possible corporate transactions that hadn’t occurred as fraudulent under state law. Injury claimants had sought to prohibit J&J from placing talc liabilities into a new corporate entity, which they said is the likely first step toward moving the pending talc-related claims into bankruptcy. More than “mere speculation” of a possible future transaction is needed to justify restraining J&J, Judge Porto said. J&J lawyer Jessica Lauria said the judge’s ruling “confirms that the plaintiff lawyers’ efforts were based on nothing more than a false narrative and were wholly unsupported by any legal authority.” J&J continues to defend the safety of its products in the court system, she added. J&J has said in settlement talks it is considering funneling talc liabilities to a new corporate entity that could file for chapter 11 protection, using a Texas statute that allows for such transactions, known as divisive or divisional mergers, The Wall Street Journal reported in July.
