Johnson & Johnson talc claimant group says spinoff will create 'barriers'

Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York
Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York October 15, 2015. REUTERS/Lucas Jackson

(Reuters) - A group representing people alleging that Johnson & Johnson’s talc-based products cause cancer said on Friday that the planned spinoff of the pharmaceutical giant’s consumer health division will create new problems for talc claimants.

The group, known as the talc claimants’ committee, filed a statement with the U.S. Bankruptcy Court for the District of New Jersey, where the Chapter 11 case of J&J’s subsidiary that holds its talc liabilities was transferred this month. The subsidiary, LTL Management LLC, filed for bankruptcy protection in October with the goal of settling 38,000 talc cases.

J&J maintains that its talc products are safe. A spokesperson did not immediately respond to a request for comment.

In Friday’s statement, the committee said J&J’s plan to split its consumer division from its pharmaceuticals business “would create further barriers between tort claimants and assets that should be available to satisfy claims.”

It contends that if J&J becomes two separately traded entities, disputes will arise over which one will be on the hook for a funding agreement in the LTL bankruptcy.

The committee also accused J&J of using the bankruptcy process as a litigation advantage.

“For bankruptcy, it simply does not get any uglier than this,” the committee said.

J&J said when it announced the split that the move had nothing to do with the talc litigation or the bankruptcy.

A status conference is scheduled on Monday before U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey. The LTL bankruptcy was initially filed in North Carolina, but the judge assigned to the case there decided on Nov. 11 that it would be better suited in New Jersey, where J&J is based and where a large chunk of the talc litigation is pending.

The case is In re LTL Management LLC, U.S. Bankruptcy Court, District of New Jersey, No. 21-30589.

For LTL Management: Gregory Gordon, Dan Prieto, Amanda Rush and Brad Erens of Jones Day

For the committee: David Molton of Brown Rudnick, Melanie Cyganowski of Otterbourg, Daniel Stolz of Genova Burns, Brian Glasser of Bailey Glasser, Lenard Parkins of Parkins Lee & Rubio and Jonathan Massey of Massey & Gail

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Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at