Johnson & Johnson Subsidiary Files for Bankruptcy for the Third Time, Aiming to Shed $100 Billion in Debt, Thousands of Cancer Patients Left Without Recourse!

A unit of Johnson & Johnson filed for bankruptcy Wednesday for the third time, Reuters reported, aiming to advance a $10 billion settlement to end tens of thousands of lawsuits alleging the company's baby powder and other talc products may cause cancer.

More than 62,000 plaintiffs have claimed that Johnson's baby powder and other talc products are contaminated and that they cause ovarian cancer and other types of cancer. In response to the lawsuits, J&J's subsidiary, Red River Talc, has filed for bankruptcy protection in federal bankruptcy court in Houston.

Erik Haas, Johnson & Johnson's vice president of global litigation, said the settlement was "fair and reasonable for all parties," noting that 83 percent of claimants have now supported it.

However, the proposed settlement has sparked controversy among a group of lawyers representing cancer victims. Some opponents said they would move quickly to ask the court to dismiss J&J's bankruptcy filing or have it moved to New Jersey. New Jersey courts have twice rejected J&J's attempts to end litigation through a so-called "Texas two-step" bankruptcy strategy.

Andy Birchfield, a lawyer who opposed the deal, pointed out that Johnson & Johnson is trying to use the bankruptcy system to reduce its liability to tens of thousands of cancer patients.

The report further explained that the "two-step" strategy used by J&J involved transferring debt to a newly formed subsidiary, which subsequently declared bankruptcy. This is a court-supervised asset and debt restructuring process designed to force all plaintiffs to accept a settlement.