A federal judge has confirmed Johnson & Johnson’s ability to establish a holding company for talc litigation cases and declare the firm bankrupt, saving billions.
Last Friday in a federal bankruptcy court in Trenton, New Jersey, Judge Michael Kaplan affirmed the pharma giant’s ability to use Chapter 11. Kaplan’s ruling freezes current outstanding talc litigation while J&J pursues a settlement.
Recently, a representative from J&J’s subsidiary, LTL management, said they were close to a talc settlement that would have cost between $4 and $5 billion, in addition to the $4.5 billion that the company had spent to resolve other talc claims over the last five years. Lawyers for the company also added that it would be impossible to litigate these cases individually.
“Today’s ruling is a positive development and a step forward to reaching a global resolution of the cosmetic talc litigation," J&J said in a statement. "We continue to stand behind the safety of Johnson’s Baby Powder, which is safe, does not contain asbestos and does not cause cancer. We look forward to resolving this matter as quickly and efficiently as possible."
Of his ruling, Judge Kaplan stated, “The court is aware that its decision today will be met with much angst and concern. The court remains steadfast in its belief that justice will best be served by expeditiously providing critical compensation through a court-supervised, fair and less-costly settlement.”
Kaplan’s ruling green-lights the drug giant’s latest move to reduce the price tag of the thousands of talc claims made. J&J has disputed all claims that the products were carcinogenic but has removed their famous baby powders off the market.