Mesothelioma Victims Reject Johnson & Johnson’s “Bad Faith” Bankruptcy Maneuver
In the face of multi-million-dollar mesothelioma and ovarian cancer verdicts against them, consumer giant Johnson & Johnson recently executed what some are calling a “bad faith” bankruptcy maneuver that – if allowed to stand – will minimize victims’ ability to get the compensation that they deserve. The company pursued a strategy known as a “Texas Two Step,” establishing a spinoff, assigning it liability for asbestos claims related to Johnson & Johnson’s Baby Powder, and then having it file for bankruptcy in order to fend off the 38,000 pending lawsuits against it. Advocates for victims plan to fight the action and will file a motion to dismiss the bankruptcy claim.
Conference of Mesothelioma Victims’ Advocates Discusses Strategy
In response to Johnson & Johnson’s maneuver, attorneys representing mesothelioma and ovarian cancer victims held a conference to discuss the options available to them. Said one, the spinoff and subsequent bankruptcy petition had a clear goal of “shutting down the pending litigation” and protecting the parent company’s significant holdings from those that it had harmed through its negligent actions. Johnson & Johnson is accused of knowing that the talc in its baby powder and other products was contaminated with asbestos, and failing to act to protect or warn its users.
Bankruptcy Judge Favors Mediation
While the bankruptcy judge has voiced enthusiasm for mediation, legal advocates for mesothelioma victims have said that they will fight allowing the bankruptcy to stand. With regard to mediation they say that it would validate the company’s “machinations and abuses of the bankruptcy system and its code,” and a committee of claimants afflicted with asbestos-related diseases says that a statement issued by the new subsidiary fails to acknowledge the devasting impact that Johnson & Johnson’s products have had on them and their families. Though the judge wants to move forward expeditiously, he acknowledged that “if parties aren’t aligned in their thoughts as to what they want to achieve in mediation, it’s a waste of their time.”
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