The bankruptcy case filed by Johnson & Johnson's subsidiary shouldering talc-related lawsuits will soon be dismissed unless a U.S appeals court agrees to reconsider its decision to nix the company's attempt to offload the litigation into chapter 11 proceedings, a federal judge said yesterday, Reuters reported. Bankruptcy Judge Michael Kaplan said during a hearing in Trenton, New Jersey that he intends to toss the chapter 11 case once the Philadelphia-based 3rd U.S. Circuit Court of Appeals issues a formal mandate to carry out a Jan. 30 ruling by a three-judge panel to dismiss the matter. The 3rd Circuit panel ruled that the J&J subsidiary, called LTL Management, had no legitimate claim to chapter 11 protection because it did not face financial distress. The dismissal is on hold since LTL asked the full 3rd Circuit late on Monday to reconsider the panel's decision. Should the 3rd Circuit deny that request, Kaplan could dismiss the case within days. "It is my intent, when the mandate is issued, to issue an order dismissing the case," Judge Kaplan said during yesterday's hearing. Read more.
In related news, Johnson & Johnson is preparing to again defend thousands of lawsuits linking its talc-based products to cancer as the company attempts to revive a bankruptcy strategy that has kept the mass injury litigation on hold for more than 16 months, WSJ Pro Bankruptcy reported. Greg Gordon, a lawyer representing J&J’s bankrupt talc unit, LTL Management LLC, said yesterday the company is requesting that a federal appellate court revisit and reverse its recent ruling dismissing the chapter 11 case. LTL may pursue its appeal with the U.S. Supreme Court, if necessary, he said. In the interim, Mr. Gordon said the company is contingency planning and preparing to resume defending the talc litigation outside bankruptcy court. “It is a herculean effort to get the defense team back in place to manage cases around the country,” Mr. Gordon said during a hearing in the U.S. Bankruptcy Court in Trenton, N.J. Yesterday's hearing comes weeks after a three-judge panel of the U.S. Court of Appeals for the Third Circuit dismissed LTL’s chapter 11 case, which has kept the talc litigation on pause since October 2021. The appellate ruling found that LTL wasn’t eligible for bankruptcy because its parent, J&J, had agreed to fund its chapter 11 expenses and any potential settlement of claims that Johnson’s Baby Powder and Shower to Shower caused ovarian cancer and contained asbestos. Read more.
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