In October 2021, Johnson & Johnson began a process to resolve claims raised in the cosmetic talc lawsuits in North America. As part of this, Johnson & Johnson established a new subsidiary called LLT Management LLC (formerly known as LTL Management LLC) (“LLT”) that would be responsible for holding and managing North American legal claims related to the Company’s cosmetic talc. LLT voluntarily filed for Chapter 11 bankruptcy, activating a process designed to resolve these claims in a way that would be reasonable for all parties, including current and future claimants.
The Court of Appeals for the Third Circuit dismissed the original filing on legal grounds in a January 2023 ruling, and LLT re-filed for voluntary bankruptcy protection in April 2023 in the U.S. Bankruptcy Court for the District of New Jersey. The re-filed case addressed concerns cited by the Court of Appeals for the Third Circuit in its dismissal and included a reorganization plan of up to $8.9 billion supported by at least 60,000 current claimants. In July 2023, the U.S. Bankruptcy Court for the District of New Jersey’s granted the plaintiffs’ motion to dismiss LLT’s refiled bankruptcy case. However, the Court stated that the Company and LLT had made “remarkable progress” towards “a fair, efficient and expeditious settlement” for all claimants and “strongly encouraged” the pursuit of a comprehensive resolution through another bankruptcy.
The Company and LLT followed that directive, and on May 1, 2024, announced a proposed Plan of Reorganization by LLT for the comprehensive and final resolution of all current and future talc claims related to ovarian cancer arising from cosmetic talc litigation against Johnson & Johnson and its affiliates in the U.S. The Plan of Reorganization by LLT would resolve 99.75% of the pending talc lawsuits against Johnson & Johnson and its affiliates in the United States. The Plan of Reorganization by LLT was developed with the assistance and support of counsel representing the overwhelming majority of current ovarian claimants and differs significantly from the prior reorganizations filed by LLT as it allows claimants to have their voice heard with a vote – which was previously denied to them by lawyers representing a small minority of claimants. If 75% of claimants vote in favor of the Plan of Reorganization by LLT, a Johnson & Johnson subsidiary may file a consensual “prepackaged” Chapter 11 bankruptcy to secure its confirmation.
The remaining pending personal injury lawsuits against Johnson & Johnson and its affiliates relate to mesothelioma and will be addressed outside of the proposed Plan of Reorganization by LLT. Johnson & Johnson already has resolved 95% of mesothelioma lawsuits filed to date. State consumer protection claims will also be addressed outside the Plan of Reorganization by LLT; Johnson & Johnson already has agreements in principle to do so. Finally, and for completeness, Johnson & Johnson has also reached an agreement in principle to resolve all talc-related claims against the Company in the bankruptcy cases filed by suppliers of its talc (Imerys Talc America, Inc., Cyprus Mines Corporation, and their related parties).
LLT's bankruptcy filings are not an admission of wrongdoing. Decades of independent scientific testing have confirmed that Johnson & Johnson’s products are safe, do not contain asbestos and do not cause cancer. We do not believe that any of the talc-related claims against the Company have merit, nor do we believe our products responsible for any illness. However, we believe that finding a way to resolve the Company’s talc litigation as quickly and efficiently as possible is in the best interests of claimants and all stakeholders.
THE CHAPTER 11 PROCESS
Chapter 11 is a well-established legal process in the United States that allows a company to complete a financial or operational restructuring under the supervision of the Bankruptcy Court. As part of the process, companies must file a Plan of Reorganization, which outlines how money that is determined to be owed to various people or organizations will be paid.
The Plan of Reorganization must be approved by a majority vote of eligible claimants and the Bankruptcy Court. This process results in a Plan of Reorganization that is fair and equitable for all stakeholders.
WHY CHAPTER 11 IS THE BEST PATH TO RESOLVE THE TALC LITIGATION
The Chapter 11 process provides a single venue for all parties to participate in the resolution process, resulting in a comprehensive, fair, and efficient settlement agreement that cannot be achieved through individual jury trials or negotiations.
While the Company is prepared to try every case, addressing each and every one of the talc cases against Johnson & Johnson on an individual basis could take decades. Even then, there is no known, definitive outcome or guarantee that all cases would reach resolution. The United States tort system is not equipped to resolve thousands of cases quickly or efficiently.
The Chapter 11 process brings everyone to the table to negotiate an agreement, provides for the quickest and most efficient resolution for people who have legal claims related to talc and provides certainty for all parties.
Importantly, Chapter 11 allows people who may make a legal claim related to Johnson & Johnson’s talc in the future to participate in the resolution through an independent representative, called a “Future Claims Representative,” appointed by the Bankruptcy Court. That Court-appointed agent assesses the number of future claims and the total amount of fair compensation and determines how compensation should be distributed.
LLT’s Plan of Reorganization announced in May 2024 was developed with the assistance and support of counsel representing the overwhelming majority of current ovarian claimants.
For more detailed information, third-party resources, and legal filings related to LLT, please visit https://lltmanagementinformation.com/.