NEW BRUNSWICK (dpa-AFX) - Johnson & Johnson (JNJ) announced Monday that the U.S. Bankruptcy Court for the Southern District of Texas denied the request by the company's subsidiary Red River Talc LLC to confirm its proposed prepackaged bankruptcy plan-notwithstanding that it offered one of the largest settlements ever proposed in a mass tort bankruptcy and was supported by the overwhelming majority of claimants.
Instead of pursuing a lengthy appeal, the Company said it has decided to return to the tort system to address and defeat what it deems to be baseless talc claims. Testimonies made under oath during the Red River bankruptcy proceedings revealed that the talc litigation is a plaintiff-lawyer-driven effort, built on flawed science and funded by third-party litigation financing, including investments from foreign sovereign wealth funds. As a result, the Company has no plans to settle or compensate plaintiff lawyers for these claims. Consequently, it will reverse approximately $7 billion from its previous reserve.
'The Court has unfortunately allowed a couple of law firms with financially conflicted motives, who have conceded they have not recovered a dime for their clients in a decade of litigation, to defeat the overwhelming desire of claimants. ..,' said Erik Haas, Worldwide Vice President of Litigation, Johnson & Johnson.
The company noted that it has prevailed in 16 of 17 ovarian cases tried in the last 11 years.
The company said it has already made great strides in resolving its talc litigation by settling 95% of filed mesothelioma lawsuits, concluded all State consumer protection claims, as well as all talc-supplier disputes.
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