After being rebuffed twice by federal courts, the $350 billion healthcare giant is attempting again to end the litigation in a so-called “Texas two-step” bankruptcy. The maneuver involves offloading its talc liability onto a newly created subsidiary, which then declares Chapter 11. The goal is to use the proceeding to force all plaintiffs into one settlement – without requiring J&J itself to file bankruptcy.
But the company needs the votes of 75% of claimants before the subsidiary can ask a bankruptcy judge to impose the deal on all of them. J&J faces lawsuits from more than 61,000 plaintiffs but the figure swells as high as 100,000 when counting claimants who haven’t sued, according to Erik Haas, J&J’s global vice president of litigation. The company maintains its talc products are safe and do not cause cancer.
Some plaintiffs’ lawyers, including Evans’, are urging their clients to support the settlement. Her attorney, Jim Onder, called the offer a good-enough deal to take, given the alternative. Some of his clients, he said, are dying while the legal fight drags on.
“While no amount of money is ever enough for the horrific suffering these women have undergone, this is an opportunity to get money now and avoid many years of additional protracted litigation,” Onder told Reuters.
But a coalition of other plaintiffs’ lawyers is fighting back, saying J&J’s bankruptcy maneuver should not be legally allowable – given that the company itself is immensely profitable – and that its $6.48 billion offer is too low.
Yeah, it’s just like when you kill someone in an automobile accident. So long as you sell the car involved, you can pass the liability to the buyer