A bankruptcy judge allowed Johnson & Johnson to use chapter 11 to drive a settlement of litigation linking its baby powder to cancer, backing a controversial tactic that has helped profitable companies freeze roughly a quarter of a million injury lawsuits, WSJ Pro Bankruptcy reported. Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., ruled Friday against personal-injury lawyers who asked to throw out the chapter 11 filing of a J&J subsidiary created last year to move into bankruptcy about 38,000 pending lawsuits over allegedly dangerous talc-based products. Judge Kaplan ruled the subsidiary, LTL Management LLC, didn’t file for chapter 11 in bad faith to gain an unfair edge over personal-injury claimants, as they had alleged, but for the legitimate purpose of resolving mass litigation. Instead he sided with J&J, which argued chapter 11 provides cancer victims with a fairer and more efficient forum to receive compensation than the civil jury system. “This chapter 11 is being used, not to escape liability, but to bring about accountability and certainty,” Judge Kaplan said.
