Judge indicates intention to dismiss J&J talc unit faces bankruptcy bid

J&J talc unit faces bankruptcy judge after tactic rejected

J&J, with a market capitalization of more than $400 billion, has argued that the avalanche of lawsuits posed a serious financial threat. The company's costs of verdicts, settlements and legal fees soared to about $4.5 billion, with no end in sight, according to bankruptcy-court filings.

The 3rd Circuit's reasoning underscored what some legal experts call an inherent contradiction: bankruptcies being executed by multinational firms worth billions of dollars that were in little danger of running out of money to pay plaintiff-creditors. LTL declared bankruptcy while J&J avoided seeking Chapter 11 protection, with all its inherent financial and reputational wreckage.

J&J said it generously financed LTL to ensure a fair settlement - better, the company and its subsidiary argued, than trial courts where some plaintiffs receive outsized payments while others receive little or nothing. The 3rd Circuit found that J&J's funding of the subsidiary, initially $2 billion and perhaps eventually more, undercut any claim of financial peril necessary to justify LTL's bankruptcy filing. In a petition seeking a rehearing filed Monday, a lawyer for LTL, Neal Katyal, called that reasoning "upside-down."found that J&J knew for decades that asbestos, a known carcinogen, was present in its Baby Powder and other cosmetic talc products.

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