Further Delays Due to Johnson & Johnson’s Legal Maneuvers

While many Texans know the state’s famed “Two-Step” as a popular dance, the term has an entirely different, if not sinister, meaning when it comes to current federal bankruptcy courtroom proceedings involving a high-profile product manufacturer. The controversial legal maneuver allows companies with large liabilities such as current and future asbestos lawsuits to hide their assets from their victims.

Johnson & Johnson, once known for their baby powder that enjoyed an unheard-of market share, is now becoming infamous for the dangers created by their hallmark product. While J&J knew for many decades, victims only recently discovered that the talc-based baby powder also contains asbestos.  Having now spent several years in state courts in lawsuits for countless diagnoses of mesothelioma, J&J changed its legal strategy.

One company becomes two and creates obstacles

Their version of the Lone Star State’s dance “performed” in federal bankruptcy court would potentially cap their liabilities, potentially denying defendants sickened by their products the compensation they deserve from Johnson & Johnson Consumer Inc. (JJCI), the parent company.

Dividing their company in two created a second business entity, LTL Management, now responsible for all baby-power liabilities, but empty of assets. Not long after being established, LTL filed for bankruptcy. Every case and all trials are currently paused stayed for the foreseeable future.

J&J promised to provide $2 billion in funds for LTL, an amount for short of their asbestos liability..

The longer that the bankruptcy case drags on, the more it benefits J&J, particularly when it comes to offering settlements to long-suffering mesothelioma victims and their family members that could be mere pennies on the dollar.