U.S. Bankruptcy Judge Michael Kaplan temporarily put most of the 40,000 litigation claims against J&J by Florida residents and others on hold through June during a hearing in Trenton, New Jersey, on April 30, 2023. The judge acted as the company is trying to settle current claims while setting aside money for future claims. The company says they have broad support for their $8.9 billion settlement while lawyers representing the litigates remain doubtful.
J&J files for bankruptcy
J&J attempted to file for bankruptcy in 2021. They planned to sell the talcum powder section of their company to its subsidy LTL Management. Then, once the sale was complete, LTL Management would immediately ask for bankruptcy protection. This move is called the Texas two-step, allowing companies facing mass tort actions to transfer financial liability to another entity. Judge Kaplan originally approved this plan, but the U.S. Court of Appeals for the 3rd Circuit overturned that decision in January 2023, saying that neither J&J or LTL Management were not in financial distress. After failing to get the Court of Appeals to rehear the case, J&J vowed in March to take the baby powder case to the United States Supreme Court. The company stopped selling its baby powder in North America in 2020 but continued to sell it worldwide until March 2023.
J&J continues to deny responsibility
In a call on April 18, 2023, J&J’s Chief Financial Officer Joseph Wolk said it was a shame that the company had to put money into the claims based on unscientific evidence. Meanwhile, those suing J&J continue to claim that the company knew the talc powder contained asbestos causing ovarian cancer.
The case against J&J continues to move through the court system. The next court hearing may be in the United States Supreme Court, assuming they agree to hear the case.