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.