Two US States To Move Forward With Talc Related Lawsuits Against JNJ

Financial Times reported that Johnson & Johnson JNJ wants to use the “Texas two-step” bankruptcy strategy to block cases claiming its talc-based baby powder caused cancer in two US states.
A New Jersey court will consider a request by a J&J subsidiary to stop New Mexico and Mississippi from proceeding with their lawsuits against the company.
According to the legal experts, the decision could set a precedent over whether and to what extent corporations can use the Chapter 11 bankruptcy process to manage lawsuits alleging violations of state consumer protection regulations.
Related: Johnson & Johnson To Stop Selling Talc-Based Powder.
J&J has established a $2 billion trust to facilitate settlements in those cases.
Forty US states and the District of Columbia are in talks with the LTL subsidiary for a potential settlement of consumer protection claims, they said in a filing.
But New Mexico and Mississippi seek to take their cases to trial in their respective state courts.
Both states oppose the request to put their cases on hold, alleging it makes a “mockery” of bankruptcy law and seeks to trample states’ right to “exercise police and regulatory powers,” according to court filings.
Price Action: JNJ shares are down 1.09% at $167.47 during the premarket session on the last check Monday.
Photo via Wikimedia Commons

Overview Rating:

Speculative

0100