Overview of J&J reorganization:

• WHO: Johnson & Johnson proposed a $6.5 billion plan to settle claims related to its talcum powder.
• Why: The settlement benefits consumers who claim the talc caused ovarian cancer.
• Where: J&J’s reorganization is before New Jersey bankruptcy court.

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Johnson & Johnson (J&J) proposed a $6.5 billion plan to settle claims related to its talcum powder in a third attempt to reorganize the company through bankruptcy.

J&J’s reorganization plan requires a supermajority of at least 75% of ovarian cancer claimants to agree to the deal. The talc cancer settlement would provide $6.5 billion over 25 years to resolve 99.75% of all pending talc lawsuits while putting LTL Management out of business, Law360 reports.

The deal is a “much better recovery than what plaintiffs can recover at trial,” Law 360 said Erik Haas, J&J Worldwide Vice President of Litigation, said in an investor call.

J&J has won 95% of the cases that have gone to trial, but at the current pace it would take decades for all the cases to be heard, Haas reportedly said. This means that many of the cases would never come to trial.

Plaintiffs have three months to vote on the plan, which Beasley Allen opposes

cThe plaintiffs have three months to vote to approve the plan.

“Let the plaintiffs vote and decide if this is in their best interest,” Haas said, according to Law360. “We never got there because of a very small contingent of plaintiffs’ lawyers who prevented that vote.”

Haas said the law firm Beasley Allen, which represents the plaintiffs, is the main opposition to the plan, Law360 reported.

“We believe that any bankruptcy based on this petition and vote will be found fraudulent and filed in bad faith under the Bankruptcy Code,” Andy Birchfield of Beasley Allen reportedly told Law360. “On behalf of our clients who deserve better, we oppose this cynical legal tactic and will oppose it at every opportunity.”

Johnson & Johnson agreed pay $700 million in January to settle investigations from 42 states and the District of Columbia into whether the company misled customers with the marketing of its talc products.

Have you used Johnson & Johnson talcum powder? Let us know in the comments.

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