Johnson & Johnson talc claimant group says spin-off will create ‘barriers’

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

(Reuters) – A group representing people alleging that Johnson & Johnson’s talc products cause cancer said on Friday that the planned spin-off of the pharmaceutical giant’s consumer health division would create new problems for applicants talcum powder.

The group, known as the Talc Seekers Committee, filed a declaration in the US District Bankruptcy Court of New Jersey, where the Chapter 11 case of the J&J subsidiary that holds its talc obligations was transferred this month. The subsidiary, LTL Management LLC, filed for bankruptcy in October to settle 38,000 talcum 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 that J&J’s plan to separate its consumer division from its pharmaceutical business “would create new barriers between liability claimants and the assets that should be available to meet the claims.”

He argues that if J&J becomes two separately listed entities, disputes will arise over which of them will have to enter into a financing agreement in the context of LTL’s bankruptcy.

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

“For bankruptcy, it just doesn’t get uglier than that,” the committee said.

J&J said when announcing the split that the move had nothing to do with talcum powder or bankruptcy litigation.

A status conference is scheduled for Monday before U.S. bankruptcy judge Michael Kaplan in Trenton, New Jersey. LTL’s bankruptcy was originally filed in North Carolina, but the judge in charge of the case ruled on November 11 that it would be more suitable in New Jersey, where J&J is based and where much of the talc litigation is. In progress.

The case is In re LTL Management LLC, US 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 from Brown Rudnick, Melanie Cyganowski from Otterbourg, Daniel Stolz from Genova Burns, Brian Glasser from Bailey Glasser, Lenard Parkins from Parkins Lee & Rubio and Jonathan Massey from Massey & Gail