DELAWARE – According to a news story on Reuters, a Delaware bankruptcy judge stated that she was undecided about a request by talc cancer personal injury claimants to block Johnson & Johnson from shifting and shielding valuable assets. U.S. Bankruptcy Judge Laurie Selber Silverstein announced this during a virtual hearing. The virtual court hearing dealt with the talc claimants’ motion concerning the Chapter 11 bankruptcy of Imerys Talc America, which is Johnson & Johnson’s former talc supplier. The motion was meant to block Johnson & Johnson from separating its talc-related liabilities from its other company assets.
The parties asking for the injunction to hold personal injury claims filed against Imerys, which is seeking to reorganize and would set up a trust fund that would reimburse personal injury claimants while also providing indemnification from Johnson & Johnson to fund the trust. According to Johnson & Johnson’s purported indemnification obligations, which the company disputes, originate from a group of supply agreements entered into by the two companies.
Johnson & Johnson faces tens of thousands of lawsuits alleging that its baby powder and other talc products are tainted with asbestos and caused the plaintiffs’ cancer. The plaintiffs include women who have ovarian cancer and others with mesothelioma. Johnson & Johnson continues to state that its consumer talcum powder products are safe.
Imerys filed for bankruptcy in 2019 after the company was named as a co-defendant in several talcum cancer lawsuits.
According to a news report from Reuters, Johnson & Johnson is considering separating its liabilities caused by the talc cancer litigation and placing the assets into a newly-formed entity that would be placed in bankruptcy protection. Johnson & Johnson could accomplish this goal under the Texas “divisive merger” law. The law permits companies to split into more than one entity. Johnson & Johnson has not denied or confirmed its intentions to pursue the divisive merger.
On Tuesday, another group of cancer plaintiffs filed papers in a Missouri state court to block Johnson & Johnson from placing its talcum powder cancer liabilities into bankruptcy.
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