Chapter 11 bankruptcy dismissed

The 3rd U.S. Circuit Court of Appeals based in Philadelphia on Friday ruled that Johnson & Johnson, on behalf of its subsidiary, LTL Management, could not delay a court order dismissing its bankruptcy. Johnson & Johnson had sought to stay the court order while the company plans to appeal to use the bankruptcy to resolve tens of thousands of lawsuits over its talc products. LTL has not yet filed a formal petition to the U.S. Supreme Court.

In January, the 3rd Circuit had ruled that neither LTL nor J&J were in financial distress, and therefore did not have a legitimate need for bankruptcy protection. The judge overseeing the case, U.S. Bankruptcy Judge Michael Kaplan indicated that as soon as the 3rd Circuit issued a formal mandate to end the bankruptcy, he would allow talc lawsuits to resume. The 3rd Circuit on Friday directed Judge Kaplan to dismiss LTL’s Chapter 11 case.

There are more than 38,000 lawsuits alleging that the company’s baby powder and other talc products are contaminated with asbestos and have caused ovarian cancer and mesothelioma. J&J maintains that its consumer talc products are safe and asbestos-free. They stopped selling the talc baby powder in the U.S. and Canada in 2020 and announced that they intended to discontinue the product worldwide in 2023.