Those suing Johnson & Johnson, claiming talc-based baby powder caused their cancer, found themselves frustrated again. After separating into two companies, Johnson & Johnson’s subsidiary LTL Management can proceed with its bankruptcy filing, the Legal Examiner reported. Under a Texas law, commonly known as the “Texas Two-Step,” Johnson & Johnson separated the company and created LTL Management. After its creation, Johnson & Johnson assigned legal liability for baby powder lawsuits to LTL Management. This business was then moved to North Carolina, where it declared bankruptcy. Filing for bankruptcy paused all lawsuits against LTL. Some of these baby powder lawsuits are sitting before the court in jury trials close to verdicts. Opponents argue that LTL’s bankruptcy was a move in bad faith to protect Johnson & Johnson from the mountain of litigation originating from their baby powder product. Judge Michael Kaplan ruled that LTL’s bankruptcy can continue to move forward. In Judge Kaplan’s decision, he referenced that frustration would be felt by plaintiffs but was optimistic that bankruptcy would be an efficient conclusion for those who claim the use of Johnson & Johnson’s talc-based baby powder caused medical problems. Market valuations of Johnson & Johnson estimate the company’s worth to be more than $430 billion, with a strong credit rating. Experts believe that J&J’s credit score to be higher than the federal government’s score.
