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Cancer victims ask court to block J&J talc bankruptcy
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Cancer victims ask court to block J&J talc bankruptcy
Jun 12, 2024 10:51 AM

NEW YORK, June 12 (Reuters) - A group of cancer victims

asked a federal judge to block Johnson & Johnson's ( JNJ )

proposed bankruptcy settlement of tens of thousands of lawsuits

alleging the company's baby powder and other talc products

caused their illnesses, according to a court filing.

The plaintiffs filed a motion late on Tuesday in a New

Jersey court seeking a temporary restraining order to stop a J&J

subsidiary from filing bankruptcy in Texas or another

jurisdiction outside New Jersey.

The plaintiffs contend they will suffer "irreparable harm"

absent a court order blocking such a filing. J&J intends to have

a subsidiary declare bankruptcy following claimants' vote on a

$6.48 billion settlement offer.

The company hopes to garner support from 75% of claimants as

part of the prepackaged bankruptcy plan. J&J set a July 26

voting deadline.

"This is yet another meritless pleading by the same small

group of plaintiff law firms who have fought every single effort

to resolve this litigation to date," Erik Haas, J&J's worldwide

vice president of litigation, said in a statement.

He repeated longstanding contentions that opposing

plaintiffs' lawyers are holding out for an additional fees

"windfall" unavailable in bankruptcy and putting their economic

interests before that of their clients, a charge those attorneys

deny.

"We therefore will immediately ask the Court to reject this

frivolous filing," Haas added.

The company faces lawsuits from more than 61,000 plaintiffs

alleging its talc caused ovarian cancer or mesothelioma, a

deadly cancer linked to asbestos exposure.

J&J maintains its talc is safe, asbestos-free and does not

cause cancer. The company contends a bankruptcy settlement pays

claimants fairly and equitably as opposed to the civil justice

system in which most plaintiffs receive nothing while some win

outsize awards.

Haas earlier this week cited growing support for J&J's

proposed bankruptcy settlement, including from lawyers

representing more than 70,000 claimants. That figure includes

claimants who have not yet sued J&J.

The healthcare conglomerate has tried and failed twice to

execute a Texas two-step bankruptcy maneuver aimed at ending

current and future talc lawsuits.

The strategy involves creating a subsidiary to absorb J&J's

talc liability, which then declares bankruptcy to resolve cases

while the company continues operating free from its own Chapter

11 filing. Two courts previously found J&J's subsidiary lacked

the "financial distress" necessary to legitimize a bankruptcy

filing.

J&J's plan is focused on resolving claims in bankruptcy from

women with ovarian and other gynecological cancers allegedly

linked to talc. J&J has settled most mesothelioma cases outside

of bankruptcy. The company this week finalized a separate $700

million agreement to resolve claims from state attorneys

general.

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