Talc Plaintiffs File Motion for Temporary Restraining Order to Limit Johnson & Johnson’s Use of Bankruptcy Strategy
A group of ovarian cancer victims has filed a motion in federal court to prevent Johnson & Johnson (NYSE: JNJ) from pursuing a third bankruptcy filing outside New Jersey. The company aims to resolve talc claims through a prepackaged bankruptcy plan in Texas, but the plaintiffs see this as a delay tactic to limit compensation. Past bankruptcy attempts by J&J in New Jersey were denied. The motion also seeks to prevent J&J from amending agreements without notifying the plaintiffs. The case, Rebecca Love, et al. v LLT Management et al., is filed in the U.S. District Court for the District of New Jersey.
- No major positive business aspects mentioned in the press release.
- Potential delays in compensating victims could lead to financial and reputational damage.
- Repeated bankruptcy attempts may signal underlying financial or legal vulnerabilities.
- Negative public and investor perception could affect JNJ stock performance.
Insights
The legal battle surrounding Johnson & Johnson’s (J&J) talc-related liabilities is intensifying with the latest motion for a temporary restraining order. This development is significant for stakeholders because it directly addresses J&J’s controversial use of bankruptcy filings to manage its legal responsibilities. The plaintiffs assert that J&J is attempting to manipulate the bankruptcy process to delay compensations and reduce payouts. It's worth noting that previous bankruptcy filings by J&J in New Jersey were denied, which may influence the court's perspective on this third attempt.
Bankruptcy laws are designed to give financially distressed companies a chance to restructure and settle their debts equitably. However, the use of these laws by a financially solvent company like J&J raises ethical and legal questions. If the court grants the TRO, it could set a precedent that limits the ability of other large corporations to use bankruptcy protections in similar contexts. Conversely, if the TRO is denied, it may strengthen J&J’s position and possibly prolong the litigation process, affecting the speed and amount of compensation for the victims.
From a financial perspective, the ongoing legal disputes and potential limitations on J&J’s bankruptcy strategy might impact investor sentiment and the company's stock performance. Legal expenses related to prolonged litigation and the potential for large settlement payouts can strain the company’s finances. Currently, J&J has set aside substantial reserves to deal with these claims, but uncertainties remain regarding the final costs. Investors might see these legal challenges as a risk factor that could affect the company's profitability and dividend payouts in the near term.
Moreover, the public perception of J&J's brand may also be at stake. Negative publicity from such high-profile legal battles could impact consumer trust and, subsequently, sales of J&J products. Long-term investors should consider the potential for ongoing liabilities and the impact on J&J’s financial health and market position.
Filing says third bankruptcy attempt would “create yet more delay” in compensating victims
The company recently announced the pursuit of a prepackaged bankruptcy plan to resolve talc claims in an unspecified federal court in
Today’s filing for a temporary restraining order accuses J&J of attempting to evade jurisdiction and manipulate the bankruptcy process to disadvantage tens of thousands of women who developed cancer from continued use of Johnson’s Baby Powder and Shower to Shower products. The motion for a TRO also seeks to prevent any amendments to agreements between J&J and its subsidiaries to fund the plan without notifying the plaintiffs.
"We will employ every appropriate mechanism possible to stop J&J from using bankruptcy to deprive women of their individual right to choose whether to settle or proceed to a jury trial. Individuals should not be coerced to accept unreasonable settlement values and terms through the bankruptcy vote of a group of others,” says Andy Birchfield of the Beasley Allen Law Firm. “On behalf of our clients, we will press on through all of J&J’s delay tactics and bullying."
The plaintiffs argue that the company's actions, including the proposed third bankruptcy filing, are designed to delay justice and reduce the funds available to compensate victims. The claims highlight the broader concerns expressed by legislators and legal experts about the use of bankruptcy protections by financially solvent companies to evade legal responsibilities for tort claims.
“Johnson & Johnson is advertising its bankruptcy plan to a group of desperate and dying claimants,” says Mike Papantonio of Levin Papantonio Rafferty emphasizing the urgency that the TRO request be heard at the earliest possible date.
The plaintiffs are represented by a coalition of law firms, including Anapol Weiss, Levin Papantonio Rafferty Proctor Buchanan O’Brien Barr Mougey P.A., Bailey Glasser LLP, Beasley Allen Crow Methvin Portis & Miles, P.C., Ashcraft & Gerel, LLP, and Burns Charest LLP.
The TRO motion is filed as Rebecca Love, et al. v LLT Management LLC et al., No. 3:24-cv-06320, in the United States District Court for the District of
View source version on businesswire.com: https://www.businesswire.com/news/home/20240612798232/en/
Mike Androvett
mike@androvett.com
800-559-4630
Source: Beasley Allen Law Firm
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