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A Johnson & Johnson subsidiary came under attack in court on Monday for attempting to use the bankruptcy process to resolve tens of thousands of claims that its baby powder and other talc-based products caused cancer, Reuters reported. The subsidiary, LTL Management, is fighting to remain in bankruptcy, arguing that is the best way to reach an “equitable, efficient, and consensual resolution” of more than 38,000 claims alleging that J&J’s talc-based products caused cancers including mesothelioma. J&J maintains that its consumer talc products are safe. J&J used a legal maneuver known as the “Texas two-step,” which allows companies to split valuable assets from liabilities through a so-called divisive merger. Lawyers representing cancer patients say that the bankruptcy case is meant to delay and frustrate lawsuits that would otherwise go to a jury trial against J&J directly. “At its core, this case is rotten,” Jeffrey Jonas, a lawyer for one of the plaintiffs’ committees said during Monday’s opening arguments. Robert Wuesthoff, president of LTL Management, testified that it would be impossible to take all of the cases to trial. Before LTL was formed, J&J had completed about 10 talc trials per year, Wuesthoff said. Most of the cancer plaintiffs would be better off resolving their claims in a bankruptcy settlement than hoping to join the “select few” who won “lottery-sized awards” in jury trials, he added. As Reuters has reported, J&J secretly launched “Project Plato” last year to shift liability from its pending talc lawsuits to the newly created subsidiary, which was then to be put into bankruptcy.

The Archdiocese of Santa Fe and four insurance companies Monday backed away from a request to have some records sealed from public view in its bankruptcy case involving hundreds of people who allege sexual abuse by Catholic clergy, the Santa Fe New Mexican reported. During a meeting and conference call with U.S. Bankruptcy Judge David Thuma, attorneys in the case also discussed the sale last week of the Immaculate Heart of Mary Retreat and Conference Center in Santa Fe for about $6.75 million. Modern Elder Academy, a Santa Fe-area business that offers lifelong learning opportunities, confirmed it is the buyer. The archdiocese is selling properties in an effort to raise enough money to settle its chapter 11 bankruptcy with more than 400 claimants of clergy sexual abuse. Archdiocese attorney Thomas Walker had argued last month in a court filing the archdiocese and numerous insurers reached confidential agreements in the 1990s, when the clergy abuse scandal began to gain attention. Los Angeles attorney James Stang, an attorney for a committee that represents victims in the case, objected to the motion to keep the documents sealed. Stang wrote in a response to the archdiocese’s request “the need for transparency is overwhelming and creditors [victims] should not be kept in the dark.”

A Johnson & Johnson subsidiary today will urge a judge to allow it to use the bankruptcy process to resolve tens of thousands of claims that the company's baby powder and other talc-based products caused cancer, Reuters reported. More than 38,000 plaintiffs have alleged the company's talc products caused ovarian cancer and mesothelioma, a deadly cancer linked to asbestos exposure. J&J maintains that its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free. The company in October placed the talc claims into a newly-created entity called LTL Management LLC, which filed for bankruptcy protection in North Carolina. J&J used a legal maneuver known as the "Texas two-step," which allows companies to split in two through a so-called "divisive merger," with one part of the company keeping valuable assets while the other is saddled with liabilities. Bankruptcy Judge Michael Kaplan in New Jersey, who took over the LTL case in November when it was transferred from North Carolina, has scheduled a five-day trial to consider a bid by committees representing the plaintiffs to dismiss the bankruptcy case. The plaintiffs argue that allowing the LTL bankruptcy to proceed would unfairly cap the payout that could be available for people who have been harmed. The bankruptcy proceeding “makes dying cancer victims, even those with a judgment, scratch, claw, and fight, potentially for years, to be compensated from funds that would have been available" before LTL was split off, the plaintiffs’ lawyers wrote in December court papers. LTL countered in court filings that bankruptcy is a legal and appropriate response to an unpredictable and "potentially financially ruinous" wave of lawsuits. J&J has proposed giving the subsidiary $2 billion to put into a trust to compensate the 38,000 current plaintiffs and future claimaints. The company has said in court filings and in public statements that LTL could also tap a stream of royalty revenue valued at more than $350 million at the time of the bankruptcy filing. Before J&J split off LTL, it faced $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy-court records. The talc lawsuits have been temporarily halted while J&J, which has a market value exceeding $446 billion, awaits the outcome of the LTL bankruptcy proceedings. Judge Kaplan has said he intends to decide whether or not to dismiss the bankruptcy case before the end of the month.

The judge presiding over the Boy Scouts of America bankruptcy has delayed the start of a trial to determine whether the BSA’s reorganization plan should be confirmed after an agreement with the official committee representing more than 80,000 men who say they were molested as children by Scout leaders and others resulted in several new plan provisions, the Associated Press reported. During a three-hour hearing Friday, Judge Laura Selber Silverstein pushed back the start of the confirmation hearing from Feb. 22 to March 9. The Boy Scouts had asked for only a one week delay, while plan opponents said they would need several weeks to analyze and respond to changes in the plan. The move follows Thursday’s announcement of a tentative agreement between the BSA and the official abuse claimants committee, known as the tort claimants committee or TCC. The committee was appointed by the U.S. bankruptcy trustee to represent and act in the best interests of all sexual abuse survivors. It had long maintained that the BSA’s plan to compensate child sex abuse victims was “grossly unfair,” representing only a fraction of the potential liabilities of insurers and local Boy Scout councils, and a fraction of their ability to pay.

The Archdiocese of Santa Fe made close to $1.7 million from its second online auction, an auctioneer’s representative said on Friday, the Santa Fe New Mexican reported. Money from the auction will go to a potential settlement agreement with more than 400 victims of child sexual abuse perpetrated over decades by clergy members with ties to the archdiocese. No agreement has been reached and a third mediator has been brought in for negotiations. The archdiocese filed for chapter 11 bankruptcy more than three years ago. Insurance companies are expected to pay a big chunk of any settlement reached. The archdiocese also is selling other properties and seeking contributions. Louis B. Fisher III of SVN Auction Services said that his company offered 86 packages of small properties. The auction ended Monday. SVN also held an online for the archdiocese last year, resulting in about $1.4 million.

Members of the billionaire Sackler family that own Purdue Pharma LP are weighing whether to add $1 billion to the OxyContin-maker’s faltering opioid settlement bid in an effort to win over holdouts, Bloomberg News reported. The move would bring the family’s total contribution to $5.325 billion to get a handful of state attorneys general to drop their opposition to Purdue’s bankruptcy plan. In return, the states would abandon appeals of the Sacklers’ demands to be freed from liability in current and future opioid lawsuits. Purdue and other companies involved in the opioid industry face thousands of lawsuits by states and municipalities that allege they helped create a crisis that’s claimed hundreds of thousands of lives in the U.S. Most of the cases are still pending, though some companies, including Johnson & Johnson and McKesson Corp., have proposed broad settlements. The latest development is a result of court-ordered mediation that came after a judge in December threw out the original settlement deal over litigation releases granted to Sackler family members. That ruling came after some states appealed the deal, saying Purdue’s owners shouldn’t get lifetime immunity from suits targeting them for the company’s role in the U.S. opioid epidemic. U.S. Bankruptcy Judge Shelley Chapman — serving as mediator in the Purdue case — said earlier this week the family and states are “even closer” to a deal than before. Chapman asked Judge Robert Drain, who is overseeing Purdue’s bankruptcy, to extend the mediation to Feb. 16.

The owner of the Fortuna House apartments in Miami's Edgewater neighborhood filed for chapter 11 protection to halt a foreclosure lawsuit, the South Florida Business Journal reported. The building is currently unoccupied because the city declared it an unsafe structure, so this raises further questions about its future. Daniel Marzano signed the petition for the Hialeah-based company. It listed assets of $5.04 million and liabilities of $3.7 million. The company owns the 24-unit apartment complex at 432 N.E. 26th St. It was built on the 4,900-square-foot lot in 1925. In December, First Citizens Bank & Trust Co. filed a foreclosure complaint against Edgewater Holdings Miami over the property, alleging $2.8 million in principal, plus interest, was due and the loan was in default for missed payments. The case was still pending, but the chapter 11 filing stayed it. Edgewater Holdings Miami also had a pending lawsuit against Fortuna Holdings, the building's previous owner, accusing it of overstating the financial performance of the building in prior years and not disclosing physical defects of the building before it was sold. Fortuna Holdings denied the allegations.

The Boy Scouts of America won pivotal support from a committee representing sexual abuse victims for a $2.7 billion settlement of their claims against the youth organization as it seeks to emerge from bankruptcy, according to a court filing, Reuters reported. Ahead of a Feb. 22 hearing before a U.S. bankruptcy judge, the official committee representing victims in Boy Scouts' chapter 11 case has agreed to drop its long-standing objections to the settlement, the filing showed. The Boy Scouts, founded in 1910, previously has apologized for the abuse and committed itself to equitably compensate people who were abused as children. More than 82,000 abuse claims have been filed against the Boy Scouts, which has called the deal the largest sexual abuse settlement in history. The Irving, Texas-headquartered nonprofit organization, which had earlier secured separate backing from tens of thousands of abuse victims, will still need to get the approval of U.S. Bankruptcy Judge Laurie Selber Silverstein to sign off on the settlement. In a vote tally announced in January, 73.57% of claimants supported the settlement plan, short of the 75% threshold the organization had been seeking. BSA has been in mediation with holdouts in recent weeks, working to bring in more support. Under the deal, the Boy Scouts would establish a $2.7 billion trust to compensate men who have said they were sexually abused as children by troop leaders. In 2020, the Boy Scouts filed for chapter 11 protection — allowing for reorganization under U.S. bankruptcy laws — in Delaware to resolve decades of abuse allegations.