Johnson & Johnson, makers of baby powder said to contain cancer-causing asbestos, has been accused of hiding its assets and evading liability for compensation by separating its baby powder from the rest of the company.
Johnson & Johnson is one of the wealthiest corporations in the world, with more than $25 billion in cash reserves. About 40,000 suits have been filed against the company with the complainants claiming that its baby powder caused cancer.
US media has reported that Johnson & Johnson has created a company called LTL and has pushed all its asbestos-related lawsuits into the new firm.
LTL, the newly created company, filed for bankruptcy last week in a federal court in Charlotte, N.C.
News site abcNews reported that Johnson & Johnson is hoping to use the bankruptcy process to dispose of 40,000 lawsuits that claim its baby powder products caused cancer.
Critics say the move is designed to sharply limit efforts to recover damages for those who say they were harmed by J&J’s baby powder.
“Johnson & Johnson filed in court last week to split its Baby Powder from the rest of the company. Why? J&J knew asbestos laced some bottles but kept it a secret for decades. Tens of thousands of women with ovarian cancer are suing, and the company wants to shield its assets,” US politician Katie Porter tweeted.
“Johnson & Johnson doesn’t have this liability anymore. They pushed all of it into the company they created just to file for bankruptcy,” said Lindsey Simon, a bankruptcy expert at the University of Georgia School of Law told news site NPR.
“As a result, Simon said, “consumers can’t recover [damages] against a big solvent company. They have to recover against this smaller fictional company created [by J&J].”
Andrew Birchfield, an attorney with the firm Beasley Allen who represents women who have sued J&J, told the news site that the legal maneuver could make it far more difficult for his clients to recover damages.
“Women and families would be devastated, and it would just be a get-out-of-jail-free card for Johnson & Johnson,” Birchfield said.
The American Association for Justice, a coalition of trial lawyers, has also condemned the J&J, saying the company’s conduct is despicable.
“There are countless Americans suffering from cancer, or mourning the death of a loved one, because of the toxic baby powder that Johnson & Johnson put on the market that has made it one of the most profitable pharmaceutical corporations in the world. Their conduct and now bankruptcy gimmick is as despicable as it is brazen,” the organization said.
In 2018, separate investigations by Reuters and The New York Times revealed documents showing Johnson & Johnson fretted for decades that small amounts of asbestos lurked in its baby powder, without telling regulators.
The company stopped selling Baby Powder in the United States and Canada in May 2020.
According to news site abcNews, the company denies that its signature Johnson’s Baby Powder and other talc-based products contained asbestos and caused cancer. It has spent nearly $1 billion defending itself.
J&J are also makers of Janssen Ad26.COV2.S, one of the Covid-19 vaccines currently being administered in Malawi.
The lawsuits don’t relate to the jab. There is no evidence that that the baby powder affected women and babies in Malawi
