More than 75% of plaintiffs have voted to support Johnson & Johnson’s proposed plan to settle roughly 61,000 lawsuits for $6.475 billion, according to Bloomberg. This could clear the way for a possible third J&J bankruptcy attempt.
The company has tried unsuccessfully for years to use the “Texas Two-Step” strategy to transfer its legal liabilities to a subsidiary and then have the subsidiary declare bankruptcy. A judge previously rejected J&J’s two bankruptcy attempts, ruling the company wasn’t qualified since it wasn’t in financial distress.
A spokesperson for J&J, Clare Boyle, said the company couldn’t yet comment on the results since the vote count isn’t officially final. If approved, the plan would settle 99.75% of the company’s remaining ovarian cancer lawsuits in the U.S.
The deal wouldn’t affect any remaining mesothelioma lawsuits, which the company says will address separately. J&J has settled 95% of its mesothelioma cases.
Despite successful litigation against the company, J&J continues to deny its talc-based products cause cancer. However, according to court documents in previous lawsuits, J&J executives were aware of asbestos-contamination concerns at talc mines as early as the 1950s. The company has spent around $1 billion on legal defense in talc cases.
Andy Birchfield, who represents plaintiffs opposed to the settlement plan, calls J&J’s voting process a “fake bankruptcy election” that wouldn’t stand up in court. “No matter what tally is announced, I expect it will be challenged and eventually rejected so that juries can decide what to do about J&J’s egregious conduct,” he said.
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