On February 25, 2022, Chief Judge Michael Kaplan, U.S. Bankruptcy Judge for the District of New Jersey, denied claimants’ motions to dismiss bankruptcy proceedings filed by LTL Management, LLC (“LTL”). Allowing LTL to continue with its bankruptcy proceedings will allow LTL to efficiently and fairly resolve current and future personal injury claims related to talc baby powder produced by Johnson & Johnson. 

In filing the motions, the claimants alleged that LTL’s bankruptcy filing was not made in good faith. Judge Kaplan disagreed. In applying the standards of the United States Court of Appeals for the Third Circuit and examining the totality of the factual circumstances, Chief Judge Kaplan concluded that in filing a chapter 11 case “with the expressed aim of addressing the present and future liabilities associated with ongoing global personal injury claims to preserve corporate value is unquestionably a proper purpose under the Bankruptcy Code.” Further, Chief Judge Kaplan concluded that the current structure of the settlement and LTL will efficiently resolve the talc claims and was not developed to secure an unfair tactical advantage. Accordingly, the claimants’ motions to dismiss were denied. The plaintiffs have said that they plan to appeal the decision. 

NJCJI applauds the U.S. Bankruptcy Court’s decision in this matter since it will promote predictability, efficiency, and fairness in the disposition of these claims. Read Judge Kaplan’s thorough decision here.