Ad Hoc Committee of Certain Talc Claimants files Informational Brief regarding second bankruptcy filing by LTL Management, LLC
Attorney members of the Ad Hoc Committee of Certain Talc Claimants in multidistrict litigation (MDL 2738, In Re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation) filed an informational brief with the U.S. Bankruptcy Court District of New Jersey regarding the second bankruptcy filing by LTL Management, LLC.
The brief describes Johnson & Johnson (J&J) subsidiary LTL Management LLC's second bankruptcy petition (Case No.: 23-12825) as "the largest fraudulent conveyance in the history of the United States," which was "collusively planned and prepackaged during the waning days" of LTL's first bankruptcy attempt [LTL 1.0].
On January 30, 2023, the U.S. Court of Appeals for the Third Circuit issued its opinion, reversing the Bankruptcy Court’s order denying the motions to dismiss the bankruptcy petition and instructing Bankruptcy Court Judge Kaplan to dismiss LTL’s Chapter 11 petition. On April 4, 2023, Judge Kaplan officially dismissed the case. LTL 2.0 was filed 2 hours and 11 minutes later.
We need to be lawyers representing claimants rather than participants in a sham plan.
MIKE PAPANTONIO, ATTORNEY AND SENIOR PARTNER, LEVIN PAPANTONIO RAFFERTY
Talc Victims Died Waiting for Justice
According to the Committee's information brief, hundreds of victims of Johnson & Johnson's (J&J) talc products died over the past 18 months, a period during which all litigation against non-debtor J&J and other non-debtor defendants was stayed as a result of LTL's first attempted bankruptcy filing.
The victims "died waiting for justice to be done and their cases returned to the civil justice system for trials by juries of their peers," the brief states.
In the brief, attorney members of the Committee underscore that version 2.0 of J&J's litigation tactic is intended to accomplish the same end.
"As the filing today points out, 'this is another sham bankruptcy that defies the courts that have said that J&J is not in financial distress and should not evade responsibility to talc victims by hiding in bankruptcy court,” said Levin Papantonio Rafferty (LPR) Attorney Chris Tisi, who is a member of the Plaintiffs’ Steering Committee in the national talc MDL and a member representative of the Official Committee of Talc Claimants.
Even lawyers who initially considered the plan and provided support have withdrawn their support as they learned more about what J&J is trying to do.
CHRIS TISI, ATTORNEY, LEVIN PAPANTONIO RAFFERTY; MEMBER OF THE PLAINTIFFS' STEERING COMMITTEE IN THE NATIONAL TALC MDL; AND A MEMBER REPRESENTIVE OF THE OFFICIAL COMMITTEE OF TALC CLAIMANTS
Plaintiffs' Attorneys Withdraw Their Support
Last week, with great fanfare, J&J publicized last week that claimants supported the bankruptcy as part of a reorganization plan that would enable the company to “equitably and efficiently resolve” tens of thousands of talc claims.
On the heels of this press, LPR Attorney Mike Papantonio issued a public statement criticizing plaintiffs' attorneys who would agree to these terms, which he said would drastically undercut and delay compensation to victims and their families.
Papantonio reiterated his position today: "We need to be lawyers representing claimants rather than participants in a sham plan."
While the Committee members stress in their informational brief that "a bad faith bankruptcy is not transformed because a debtor claims that certain creditors want to support its settlement," such claimants' support appears to be a non-issue.
“It turns out the the vast majority of the law firms representing talc victims do not support this bankruptcy and proposed plan," Tisi stated.
"Even lawyers who initially considered the plan and provided support have withdrawn their support as they learned more about what J&J is trying to do.”
"Even lawyers who initially considered the plan and provided support have withdrawn their support as they learned more about what J&J is trying to do.”
In the informational brief, Committee members urge the Hon. Michael B. Kaplan to consider that "To honor the memory of those victims who have died, to bring justice to the survivors and their families, and to protect the bankruptcy system from fraudulent machinations that erode its integrity, in light of the fraud and sanctionable conduct that permeates LTL’s second filing, this case must also be dismissed."
Timeline and History of LTL & Bankruptcy Filings
MDL 2738 comprises nearly 50,000 individual talcum powder lawsuits from individuals who allegedly developed ovarian cancer or mesothelioma after regular, prolonged use of Johnson’s Baby Powder and Shower to Shower body powder. The lawsuits claim that Johnson & Johnson deceptively marketed the talc-based products for feminine hygienic use without disclosing talc’s carcinogenic properties.
In October 2021, J&J created subsidiary LTL, which would carry the corporation's liabilities relating to the talc litigation, while the parent company would hold onto productive business assets.
On October 14, 2021, LTL filed for Ch. 11 bankruptcy protection. At this point in time, parent company J&J had a market capitalization in excess of $400 billion and held $31 billion in cash and marketable securities.
The U.S. Court of Appeals for the Third Circuit ordered dismissal of the bankruptcy petition on the basis that the petition breached Bankruptcy Code section 1112(b)’s good-faith standard, stating, “At base level, LTL, whose employees are all J&J employees, is essentially a shell company ‘formed,’ almost exclusively, ‘to manage and defend thousands of talc-related claims....'"
Just over 2 hours after the Third Circuit dismissed LTL 1.0, J&J announced that LTL had re-filed for Chapter 11 bankruptcy protection, prompting statements of outrage from attorneys of talc plaintiffs' attorneys and making "a mockery of the Third Circuit’s Opinion, Judgment, and Mandate, and of our justice system," the Committee's informational brief stated.
Additional Reference Materials
Read the Ad Hoc Committe of Certain Talc Claimants' Informational Brief in its entirety here.
The Ad Hoc Committee of Certain Talc Claimants issued a separate press release on the bankruptcy filing, which can be read here.
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About Levin Papantonio Rafferty
The Levin Papantonio Rafferty law firm has been representing injured people across the globe since 1955. The firm has gained national recognition as one of the most successful personal injury firms in the world and has been featured on CNN, NBC, ABC, CBS, and Fox, as well as Wall Street Journal, New York Times, Time Magazine, Forbes, and National Law Journal.
Levin Papantonio Rafferty attorneys handle lawsuits throughout the country involving prescription drugs, medical devices, medical malpractice, car accidents, and business litigation. Levin Papantonio Rafferty has earned over $30 billion in jury verdicts and settlements, litigating against some of the largest corporations in the world.
For questions about the firm’s legal practice, call 1 (800) 277-1193.
To interview Mike Papantonio or Chris Tisi, contact Sara Stephens at sstephens@levinlaw.com or call 281-744-6560.
