Johnson & Johnson should not be allowed to use a small unit’s bankruptcy case to end tens of thousands of cancer lawsuits because the strategy is rooted in bad faith, the U.S. Trustee said in a court filing, Bloomberg News reported. The health care products maker is trying for the second time to get itself “out of a jam as cheaply as possible,” using the chapter 11 filing of LTL Management, said the agency, which is an arm of the U.S. Justice Department. J&J created LTL in 2021 and made it responsible for resolving claims that tainted baby powder and similar products caused cancer. In a Monday court filing, the U.S. Trustee joined a group of advocates for cancer victims who have asked a federal judge in New Jersey to dismiss the LTL bankruptcy case. J&J put LTL back into bankruptcy last month about two hours after the first LTL case was dismissed. “In the weeks leading up to its second bankruptcy filing, LTL and its ultimate parent, Johnson & Johnson, engaged in a series of transactions that LTL admits were designed for no purpose other than creating artificial ‘financial distress,’” the U.S. Trustee said in the filing. J&J has an $8.9 billion settlement agreement with the “vast majority” of the law firms representing talc claimants, the company’s head of litigation, Erik Haas, said in an emailed statement. Should the bankruptcy survive and 75% of claimants vote in favor of the deal, all current and future talc suits would be settled.
