Talc Claimants Slam Johnson & Johnson’s En Banc Bid in Chapter 11 Case

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(USA Herald) – Talc claimants are fighting back against Johnson & Johnson (J&J) subsidiary LTL Management’s bid for an en banc hearing in its Chapter 11 case. The Third Circuit panel had earlier thrown out the bankruptcy case filed by LTL, which was aimed at avoiding liability on tens of thousands of product liability claims related to talc products.

The claimants argue that LTL filed an improper bankruptcy petition to avoid paying the claims, and its dilatory conduct during the proceedings had caused significant harm to the plaintiffs. The opposition brief argues that LTL’s arguments about the tort system’s inadequacy ring hollow given its conduct during bankruptcy.

The committee claims that the Third Circuit panel’s decision was correct and doesn’t create any circuit conflict or break new legal ground. It says that LTL’s argument that the panel’s case-specific focus on the debtor’s finances contravenes Supreme Court precedent is misplaced, as LTL identifies no contrary Supreme Court case. LTL invokes only general equity and bankruptcy maxims that do not require disregard of the debtor’s separate corporate identity.

The rehearing petition is the latest development in LTL’s Chapter 11 case, which was filed to hold the parent company’s legacy liability for over 38,000 claims alleging the sale of talc products that contain asbestos, causing deadly diseases such as ovarian cancer and mesothelioma. J&J created LTL in an attempt to assign the assets of Johnson & Johnson Consumer to a new entity and spun off the billions in talc liability to LTL. The committee is represented by Bailey & Glasser LLP, Brown Rudnick LLP, Genova Burns LLC, Massey & Gail LLP, MoloLamken LLP, Otterbourg PC, Pachulski Stang Ziehl & Jones LLP and Parkins & Rubio LLP.

The Third Circuit’s panel decision dismissing the bankruptcy case was well-reasoned and carefully tethered to the specifics of the case, according to the committee. The claimants include ovarian cancer and mesothelioma patients and health insurance providers. LTL is represented by Hogan Lovells, and Jones Day.

In conclusion, the claimants are fighting Johnson & Johnson’s subsidiary LTL Management’s request for an en banc review of the panel decision that threw out the company’s Chapter 11 case. The opposition brief argues that LTL’s bankruptcy petition was improper, and its dilatory conduct during the bankruptcy proceedings had caused significant harm to the plaintiffs. The claimants argue that LTL failed to meet the ordinary requirement of financial distress required for bankruptcy and that the panel’s decision was correct and didn’t break any new legal ground or create circuit conflict.