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HomeLawPossible Third J&J Bankruptcy Attempt Amplifies Concerns over Corporate Abuse of Courts

Possible Third J&J Bankruptcy Attempt Amplifies Concerns over Corporate Abuse of Courts

Possible Third J&J Bankruptcy Attempt Amplifies Concerns over Corporate Abuse of Courts

TRENTON, N.J., Oct. 24, 2023 /PRNewswire/ — With Johnson & Johnson signaling the potential for a third attempt to offload liabilities in the talc litigation through the bankruptcy courts, attorneys representing thousands of women diagnosed with ovarian cancer are calling on Congress to intervene and warning that plaintiffs will continue to resist bad-faith attempts to evade responsibility. 

“The efforts by one of the largest and most profitable companies in the world to shirk responsibility for marketing a dangerous product and denying victims their constitutional rights to bring litigation in the civil courts have repeatedly failed,” says Michelle Parfitt, co-lead counsel for more than 50,000 plaintiffs whose claims were previously consolidated in multidistrict litigation in federal court. “J&J’s corporate leadership seems determined to keep pushing this strategy, and as advocates for these women we will continue to push back.”

During the past year, the U.S. Bankruptcy Court in New Jersey and the Third U.S. Circuit Court of Appeals has ruled J&J’s ploy does not meet the standards for a good faith bankruptcy, in large part because the multibillion-dollar company is not in “financial distress.” The Third Circuit’s opinion noted that J&J has over $400 billion in equity value, a AAA credit rating, and $31 billion in cash and marketable securities. The company also distributed more than $13 billion to shareholders in both 2020 and 2021.

The strategy employed by J&J is commonly referred to as the “Texas Two-Step,” a process allowing a corporation to spin off litigation into a separate entity, which then seeks bankruptcy protection. In J&J’s case, the company sought to resolve claims from women who allege that the company’s talc products contain asbestos and cause ovarian cancer and mesothelioma. Attorneys for the plaintiffs believe that under bankruptcy laws those victims would receive far less compensation than through civil trials or settlement negotiations outside of the bankruptcy system.

“Multidistrict litigation has been repeatedly shown to be an effective and equitable means to litigate and resolve mass torts, so it’s disconcerting to learn that J&J is again considering the bankruptcy courts as a shield against accountability,” says Leigh O’Dell, co-lead counsel for the plaintiffs’ committee in the MDL and attorney at Beasley Allen Law Firm. “We believe it is time for congressional action to bar this tactic that seeks to deny consumers their 7th Amendment rights and help ensure monolithic corporations can’t exploit legal loopholes at the expense of the individual.” 

For more information contact:
Mike Androvett
[email protected]

SOURCE Beasley Allen Law Firm

Originally published at https://www.prnewswire.com/news-releases/possible-third-jj-bankruptcy-attempt-amplifies-concerns-over-corporate-abuse-of-courts-301966074.html
Images courtesy of https://pixabay.com

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