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LTL Administration

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2021: Johnson & Johnson transferred claims debts for cancer-causing baby powder to LTL Administration

In mid-October 2021, Johnson & Johnson (J&J) transferred to bankruptcy proceedings its obligations in more than 37 thousand lawsuits linking talc-based products with cancers, thus hoping to stimulate the settlement of claims for damages.

The drugmaker said the filing of the lawsuit by its subsidiary LTL Administration was aimed at settling all claims related to cosmetic talc, as well as for all present and future plaintiffs. Filing for Chapter 11 makes J&J the last company to address this chapter as a mechanism to resolve a large number of defective product claims. Lawyers for the victims criticized J&J for considering bankruptcy because of talc, saying that Chapter 11 is not intended to help healthy companies avoid liability.

Johnson & Johnson has transferred claims debts for cancer-causing baby powder to LTL Administration and is now going bankrupt

Talc consists of a talc mineral, which in its pure form contains asbestos, a substance that can cause cancer. In 1976, the medical business agreed that all talc products should not contain asbestos.

J&J's actions underscore the risks that the companies faced in connection with ongoing talc litigation, which as of July 2021 totaled about 34 thousand lawsuits linking Johnson's Baby Powder baby powder with ovarian cancer, asbestos poisoning and other diseases. In 2020, J&J announced that it could stop selling its baby powder in the United States and Canada after gross sales fell by 60% since 2017.

Chapter 11 gives corporate defendants powerful tools to stimulate litigation, such as automatic termination of disclosure and litigation procedures. J&J, which did not file for bankruptcy, said on October 14, 2021, that it was providing financial support for a compensation plan to be developed in court. The company claims that its talc, which it stopped selling in 2020, is safe and does not cause cancer, and that numerous tests did not reveal the presence of asbestos. Since 2018, the company has brought several cases of talc harm to court and although some jurors sided with the company, others have awarded huge damages, including a $2.1 billion court decision in Missouri that J&J paid in the summer of 2021.[1]

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