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Johnson & Johnson cannot delay talc unit case’s dismissal, appeals court says
By Sarah Lizee
Olympia, Wash., March 31 – Johnson & Johnson was denied a request to delay a ruling that subsidiary LTL Management LLC’s Chapter 11 bankruptcy case should be dismissed, according to an opinion filed Friday by the U.S. Court of Appeals for the Third Circuit.
As previously reported, the appeals court filed an opinion in late January that said LTL’s case had been filed in bad faith, given LTL Management was not in financial distress. Johnson & Johnson had asked for a rehearing on the issue but was denied the request.
Since then, Johnson & Johnson has been planning to appeal to the U.S. Supreme Court regarding the legitimacy of LTL’s case. The parent company was hoping to have more time to pursue the appeal.
On Friday, the Third Circuit court directed the U.S. Bankruptcy Court for the District of New Jersey to dismiss the case.
As background, Johnson & Johnson Consumer Inc., a wholly owned subsidiary of Johnson & Johnson, produced several products, one of which was Johnson’s Baby Powder. Concerns that the talc in the baby powder contained traces of asbestos brought in tens of thousands of lawsuits against the companies.
Eventually, Johnson & Johnson Consumer split into two new entities, LTL Management, which holds almost all the liabilities relating to the talc litigation, and Johnson & Johnson Consumer Inc., which holds virtually all the productive business assets. This series of transactions was done under Texas state law.
LTL Management was put into Chapter 11 in October 2021. The next month, an injunction by U.S. bankruptcy judge Michael B. Kaplan had paused the talc litigation.
Dismissal of the Chapter 11 case would reopen the litigation against Johnson & Johnson.
Johnson & Johnson is a consumer products company based in New Brunswick, N.J. The LTL Management subsidiary filed Chapter 11 bankruptcy on Oct. 14, 2021 under case number 21-30589.
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