A Johnson & Johnson subsidiary that is pursuing a US bankruptcy to resolve thousands of talcum powder lawsuits has filed its plan for compensating cancer victims with pending claims, and the proposed plan directly impacts the rights of Canadians.
The Chapter 11 Plan of Reorganization provides the first public details of which pending cancer claims will be eligible for compensation from a proposed Talc Personal Injury Trust that J&J previously pledged $8.9 billion USD to fund. The cancer claims at issue allege that J&J’s talcum powder products cause certain cancers, including mesothelioma, and ovarian cancer. Under the proposed Plan, Canadian claims will be eligible for compensation, but Canadians who choose an “accelerated” claim process will be paid less than American claimants.
It is not certain that this plan will ultimately come to fruition. To become effective, the Plan will need to be approved by prospective claimants and the bankruptcy judge, as well as survive any motions to dismiss, including several that are pending before the court and were scheduled to be heard beginning June 27, 2023.
How will Canadians be compensated under J&J’s proposed plan?
The Chapter 11 Plan of LTL Management, which was most recently amended on June 26, 2023, would allow both Americans and Canadians (or their Estates) who have suffered certain forms of cancer subsequent to regular use of J&J talc products to file claims for compensation from a proposed trust to be established to pay out over several billion dollars to personal injury claims over a 25-year span.
To qualify for compensation, Canadian cancer victims must have been first diagnosed with mesothelioma, ovarian cancer (i.e., epithelial cancer originating in the ovaries, fallopian tubes, and/or peritoneum) or another form of cancer of the female gynecologic tract at least 10 years after their first use of J&J talc products.
Prospective claimants will have the option of applying through a standard evaluation process – where claims will be assessed point values based on factors such as age at injury and the presence or absence of risk factors and the cash value will be determined based on the number of claims approved – or through an accelerated claims process – where claims will be assessed more quickly but will all be paid a low pre-set dollar figure. However, claimants who are pursuing non-ovarian cancer gynecological cancer claims are limited to pursuing accelerated claims only.
Notably under the proposed Plan, Canadians will be at a significant disadvantage relative to Americans if pursuing the accelerated process. Under that option, Canadians will only be paid the small sum of $500 per claim; half of what Americans will be paid for accelerated claims.
Why is bankruptcy being pursued to resolve talcum powder claims?
The proposed Plan to resolve all claims involving J&J talc products was filed by LTL Management, a J&J subsidiary created through a controversial maneuver known as the “Texas two-step.”
In 2021, J&J assigned all liabilities for its talcum powder products to a new entity – LTL – and immediately the entity petitioned for bankruptcy. At the time over 40,000 talc-cancer lawsuits were pending against J&J and it was in the process of discontinuing all sales of talc-based products (Read my prior blog, Johnson & Johnson stopping all sales of talcum-based baby powder for more info). As a result of the bankruptcy, all pending talc claims against J&J were stayed (i.e., paused) and, if approved, victims will be restricted to claiming under the Plan.
The current bankruptcy is LTL’s second attempt at having a Plan approved to resolve talc-related claims (Read my prior blog, Johnson & Johnson’s bankruptcy strategy for talcum powder cancer lawsuits rejected by US Court on the appeal decision, for more info). LTL’s first bankruptcy petition was unanimously dismissed by a Court of Appeals earlier this year which determined that LTL was not permitted to use the Chapter 11 process as it was not in legitimate financial distress (Read my prior blog, Johnson & Johnson’s bankruptcy strategy for talcum powder cancer lawsuits rejected by US Court for more info).
Canadians affected by J&J’s talcum powder products are encouraged to seek representation
Any Canadian who believes that they or a family member may have been harmed by Johnson & Johnson’s talcum powder products is encouraged to reach out to a lawyer to ensure that their potential legal interests in the new bankruptcy, if any, are protected.
Siskinds LLP is representing Canadians who have been diagnosed with cancers, including mesothelioma or cancers of the ovaries, fallopian tubes, or peritoneum, after regular use of J&J talcum powder products. If you or a loved one have been impacted, contact us at [email protected] or visit our talcum litigation landing page for more info.