A bankruptcy judge refused an initial bid to pause talc litigation against Johnson & Johnson, setting the stage for a November hearing that will likely scrutinize the corporate maneuvering the company undertook to try to settle thousands of personal-injury lawsuits through a subsidiary’s chapter 11, WSJ Pro Bankruptcy reported. Judge J. Craig Whitley of the U.S. Bankruptcy Court in Charlotte, N.C., on Friday refused to extend to J&J a temporary restraining order that would have halted lawsuits against the consumer-goods giant during the two-week period before next month’s hearing. Instead, the personal-injury lawsuits will only be paused against the newly formed J&J subsidiary that was put into chapter 11 earlier this month and its corporate predecessor, the judge said during a hearing. The ruling effectively limits, at least until early November, the scope of the J&J subsidiary’s bankruptcy stay, a powerful legal tool that immediately halts all lawsuits against a company when it files chapter 11. The J&J subsidiary, called LTL Management LLC, is arguing that its stay should also include its parent company—even though it is not in chapter 11 — because they both have coverage rights under shared insurance policies and because the two corporate entities, though distinct, are “inherently intertwined” by the same talc-injury claims.
