The Official Committee of the Talc Claimants dispute LTL’s second bad-faith bankruptcy filing emphasizing LTL’s attempts to manufacture financial distress

, /PRNewswire/ — Today, the Official Committee of Talc Claimants (“TCC,” the “Committee”) filed a motion to dismiss the second bankruptcy petition of LTL Management (“LTL,” the “Debtor”). The TCC urges the U.S. Bankruptcy Court for the District of New Jersey to dismiss the Debtor’s bankruptcy case on the grounds that, inter alia, LTL cannot establish financial distress and, therefore, its second bankruptcy filing was not brought in good faith. 

In its motion, the TCC states, “Since October 2021, Johnson & Johnson has been seeking a litigation advantage over the tens of thousands of talc victims who have endured delay after delay during LTL 1.0 – the Debtor’s first impermissible bankruptcy filing. The claimants have waited long enough. Hundreds of talc victims have died during the Debtor’s first fraudulent bankruptcy without receiving fair compensation or their day in Court. And, because of LTL’s renewed abuse, that tragedy will continue – more victims will lose their battle with cancers caused by J&J’s deadly talc products. LTL’s fraudulent conduct cannot be rewarded with another 18 months in bankruptcy while talc victims continue to suffer and die.”

The Bankruptcy Court recognized that LTL has an “uphill battle” and expressed significant skepticism that the Debtor could show financial distress necessary for bankruptcy under the standard set by the Third Circuit. LTL points to its voluntary abandonment of the $61 billion 2021 Funding Agreement to argue it is now in financial distress. But the TCC’s filing shows that such self-inflicted, manufactured financial distress is not legally sufficient to justify bankruptcy. Moreover, the Third Circuit specifically anticipated this move and warned that it would be a fraudulent conveyance.

The TCC also notes that the Debtor’s pre-filing conduct demonstrates a clear desire to use this bankruptcy to “obtain a tactical litigation advantage.”

The Committee states that “LTL’s continued abuse of the bankruptcy system and new effort to force a resolution on claimants who do not want to settle on the terms offered by J&J is offensive and appalling.  J&J is seeking to use bankruptcy to cram down its proposal on nonconsenting claimants. That attempt is illegitimate and unlawful, and this abusive second bankruptcy cannot be allowed to continue.”

The Committee asks the Court to dismiss this case promptly.

The TCC’s motion to dismiss the second LTL bankruptcy case can be viewed on the Case docket, available at:

https://document.epiq11.com/document/getdocumentsbydocket/?docketId=999534&projectCode=LCN&docketNumber=286&source=DM

SOURCE Official Committee of Talc Claimants