In Oktubre 2021, Johnson & Johnson began a process to resolve claims raised in the cosmetic talc lawsuits in North America. As part of this, Johnson & Johnson established a new subsidiary called LTL Management LLC (LTL) that would be responsible for holding and managing North American legal claims related to the Company’s cosmetic talc. LTL voluntarily filed for Chapter 11 bankruptcy, activating a process designed to resolve these claims in a way that would be reasonable for all parties, including current and future claimants.
On Abril 4, 2023, LTL re-filed for voluntary Chapter 11 bankruptcy protection with a plan that will equitably and efficiently resolve all claims arising from talc litigation against the Company and its affiliates in North America. The re-filed case addresses concerns cited by the Court of Appeals for the Third Circuit, which dismissed LTL’s initial bankruptcy on legal grounds in a Enero 2023 ruling. In addition, LTL’s reorganization plan announced in Abril 2023 is supported by 60,000 current claimants. To demonstrate our commitment to a complete resolution of the litigation, the Company has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL’s initial bankruptcy filing in Oktubre 2021.
On Abril 20, 2023, the Bankruptcy Court authorized a preliminary injunction to extend the stay on pending cases in the Company’s talc litigation in North America. The stay will remain in place until Hunyo 15, 2023, providing additional time for the parties to reach a permanent resolution.
Neither of LTL’s bankruptcy filings is an admission of wrongdoing. Decades of independent scientific testing have confirmed that Johnson & Johnson’s products are safe, do not contain asbestos and do not cause cancer. We do not believe that any of the talc-related claims against the Company have merit, nor do we believe our products responsible for any illness. However, we believe that finding a way to resolve the Company’s talc litigation as quickly and efficiently as possible is in the best interests of claimants and all stakeholders.
THE CHAPTER 11 PROCESS
Chapter 11 is a well-established legal process in the United States that allows a company to complete a financial or operational restructuring under the supervision of the Bankruptcy Court. As part of the process, companies must file a Plan of Reorganization, which outlines how money that is determined to be owed to various people or organizations will be paid.
The Plan of Reorganization must be approved by a majority vote of eligible claimants and the Bankruptcy Court. This process results in a Plan of Reorganization that is fair and equitable for all stakeholders.
WHY CHAPTER 11 IS THE BEST PATH TO RESOLVE THE TALC LITIGATION
The Chapter 11 process provides a single venue for all parties to participate in the resolution process, resulting in a comprehensive, fair, and efficient settlement agreement that cannot be achieved through individual jury trials or negotiations.
While the Company is prepared to try every case, addressing each and every one of the talc cases against Johnson & Johnson on an individual basis could take decades. Even then, there is no known, definitive outcome or guarantee that all cases would reach resolution. The United States tort system is not equipped to resolve thousands of cases quickly or efficiently.
The Chapter 11 process brings everyone to the table to negotiate an agreement, provides for the quickest and most efficient resolution for people who have legal claims related to talc and provides certainty for all parties.
Importantly, Chapter 11 allows people who may make a legal claim related to Johnson & Johnson’s talc in the future to participate in the resolution through an independent representative, called a “Future Claims Representative,” appointed by the Bankruptcy Court. That Court-appointed agent assesses the number of future claims and the total amount of fair compensation and determines how compensation should be distributed.
LTL’s Plan of Reorganization is supported by over 60,000 current claimants.
For more detailed information, third-party resources, and legal filings regarding LTL’s Chapter 11 case, please visit https://ltlmanagementinformation.com/.