Today, the U.S. Bankruptcy Court for the Southern District of Texas denied the request by Johnson & Johnson (NYSE: JNJ) (the "Company") subsidiary Red River Talc LLC ("Red River") to confirm its proposed prepackaged bankruptcy plan—notwithstanding that it offered one of the largest settlements ever proposed in a mass tort bankruptcy and was supported by the overwhelming majority of claimants.
Rather than pursue a protracted appeal, the Company will return to the tort system to litigate and defeat these meritless talc claims. The disclosures made under oath in the Red River bankruptcy affirmed that the talc litigation is a plaintiff-lawyer driven fake tort, premised on junk science and fueled by third party litigation financing including from foreign sovereign wealth funds. Consequently, the Company has no intent to settle or pay plaintiff lawyers on such meritless claims. Accordingly, the Company will reverse approximately $7 billion of the previous reserve.
"The Court has unfortunately allowed a couple of law firms with financially conflicted motives, who have conceded they have not recovered a dime for their clients in a decade of litigation, to defeat the overwhelming desire of claimants. As we have repeatedly stated, in the absence of plan confirmation, we will vigorously present our case in the tort system, starting with the adjudication of the motions pending in the Multi-District Litigation to exclude plaintiffs’ experts and to disqualify the lead counsel for its unethical breaches. In view of the learnings from the bankruptcy case, we are more confident than ever in our position in the tort system," said Erik Haas, Worldwide Vice President of Litigation, Johnson & Johnson. "We prevailed in 16 of 17 ovarian cases tried in the last 11 years and will devote our efforts to defeating these fake claims."
The Company has already made great strides in resolving its talc litigation by settling 95% of filed mesothelioma lawsuits, concluded all State consumer protection claims, as well as all talc-supplier disputes.
"Today’s decision highlights the broken tort system in the United States. The Company reiterates that none of the talc-related claims against it have merit and attempts to resolve this litigation were aimed at moving past this issue," said Mr. Haas. "The decision to litigate every filed case is based on the simple fact that this is a fake claim created by greedy plaintiff lawyers looking for another deep pocket to sue and fueled by litigation-financed attorney advertising."
https://finance.yahoo.com/news/johnson-johnson-return-tort-system-022000537.html
