J & J, valued at $2 Billion, Falsely Claims Bankruptcy to Evade Thousands of Lawsuits

 By Yehudit Garmaise

Johnson & Johnson faces approximately 38,000 lawsuits that claim that the company’s baby powder contains tiny amounts of asbestos that cause ovarian cancer and mesothelioma, but the company, one of the wealthiest companies in the US, is accused of redistributing its liabilities into a new company to claim bankruptcy and delay and block lawsuits.

Using a dishonest legal maneuver that is now used by many rich corporations, lawyers say J & J, which is valued at more than $2 billion, has transferred into a new company, called LTL, all of its liabilities that resulted from claims of cancer claims caused by baby powder, according to National Public Radio.

In North Carolina, LTL then quickly filed for bankruptcy: a move that quickly stopped the baby powder litigation, which now could remain on hold for years.

Lawyers call this shady strategy, “the Texas two-step,” as the law is authorized in Texas and describes a complicated country dance.

“It’s heartless; it’s ruthless,” said Hope Schiller, who tragically lost her 22-year-old daughter Hanna to cancer that the family claims was caused by J & J baby powder. “It’s disgusting that for monetary gain they will stop at nothing.”

The plaintiffs’ attorneys in the J & J cases, however, are attempting to block J&J from implementing their bankruptcy strategy: also called a “divisive merger” to evade litigation, but judges are denying the requests.

While Congress considers bi-partisan legislation to limit such bankruptcy deals, for now a small number of bankruptcy judges are allowing and some say, encouraging, wealthy companies and individuals accused of wrongdoing to use the “Texas Two-Step” to evade compensating and providing justice to cancer victims and other complainants.