ST. LOUIS, Aug. 24, 2021 /PRNewswire/ -- Attorneys for
thousands of women diagnosed with ovarian cancer after decades of
exposure to Johnson & Johnson's (NYSE:JNJ) talcum powder
products are seeking a temporary restraining order and permanent
injunction to prevent J&J, or any of its corporate affiliates,
from transferring assets to a subsidiary and plunging it into
bankruptcy.
The company has not denied that it is scheming to shield its
$500 billion in assets from women
cancer victims by moving its growing talc-cancer liabilities to a
subsidiary before forcing that entity into bankruptcy. The total
damages suffered by current talc-cancer victims is estimated at
close to $17 billion.
Historically, bankruptcy cases filed to resolve litigation,
including those related to asbestos, often take years, and almost
never fully repay creditors, including personal injury
victims.
In a motion filed in state district court in Missouri, the women argue that such a move
amounts to a fraudulent conveyance and that laws in Missouri and most other states prevent such
transfers of liabilities by solvent and profitable companies.
They also note that such an approach could immediately halt
more than 34,000 claims by ovarian cancer victims and force all
related litigation into bankruptcy court, rather than giving these
victims their day in trial court before judges and juries.
"Johnson & Johnson has actively threatened attorneys for
plaintiffs with this scheme to force out-of-court settlements at
pennies on the dollar. This is clear from what has been widely
reported, combined with J&J's response," says Andy Birchfield, Mass Tort Section Head of the
Beasley Allen law firm, attorney for
three women or surviving relatives named in the filing. "J&J
has betrayed its customers and concealed from the public that its
asbestos-contaminated talc was poisoning women for generations. It
used its powerful marketing arm to target Black women and other
minorities, bullied the FDA to look the other way, and is now
attempting to abuse the bankruptcy system to avoid its
responsibility."
The strategy is known in legal circles as the "Texas Two-Step"
because Texas law allows
economically viable companies to incorporate in the state and then
transfer liabilities to another entity with limited or no assets.
In a recent similar case, In re DBMP LLC, U.S. Bankruptcy
Judge J. Craig Whitley was critical
of the practice and said personal injury claimants may have been
defrauded in the process. In recent years, other companies
including Georgia-Pacific LLC also split off asbestos liabilities
through divisional mergers before placing them in bankruptcy.
"J&J has not denied they are considering such an outrageous
plan," says Michelle Parfitt,
co-lead counsel in the Talcum Powder MDL and Senior Partner at
Ashcraft and Gerel, who also represents the plaintiffs. "If J&J
is willing to resolve these claims within the civil court system,
then such an injunction would have no effect on J&J's business
operations and should not create any objections on their part."
Birchfield says the filing could have been made in several other
states, but Missouri was chosen
because several talc-related trials are pending there. The next
trial is scheduled to begin September
7, in St. Louis.
"This scheme is part of a disturbing trend," says Alexandra Walsh, founder of Walsh Law. "If J&J is allowed to evade
its obligations in this way, it will set a dangerous precedent,
prompting other hugely profitable corporations to use the
bankruptcy laws to shirk responsibility for their
wrongdoing."
Dozens of peer-reviewed medical studies published in the
last 35 years have found a statistically significant
correlation between talcum powder use and ovarian cancer. Further
research has confirmed that talc particles, when applied to the
perineal area, can migrate to the ovaries and result in
inflammation and related malignancies. In December 2018, Reuters reported that
J&J knew for decades that its talc products were laced with
asbestos but kept that information from regulators and the
public.
In May 2020, Johnson & Johnson
announced the company would no longer make or market talc-based
powders for the North American market.
In June, the U.S. Supreme Court declined to hear an
appeal resulting from a $2.1
billion judgment against the company entered by the
Missouri Court of Appeals and
upheld by the Missouri Supreme Court. That appellate court
found that J&J had engaged in "reprehensible conduct" for
decades by repeatedly denying the presence of asbestos and the
known association between talc use and ovarian cancer.
Media Contact:
Mike Androvett
214-507-5456
mike@androvett.com
View original
content:https://www.prnewswire.com/news-releases/ovarian-cancer-victims-ask-court-to-block-johnson--johnsons-texas-two-step-bankruptcy-plan-301362146.html
SOURCE Beasley Allen