Filing for bankruptcy as a tactic to avoid asbestos claims

On Behalf of | Aug 11, 2023 | talcum powder

If you are suffering from mesothelioma due to asbestos exposure then you may be entitled to claim against the companies responsible. 

Many big manufacturers knew about the dangers of asbestos over 50 years ago. But they still continued to use it in their products – in some cases, until very recently. What’s more, many continue to deny the links between asbestos in their products and the illness people exposed to it have suffered.

Johnson and Johnson (J&J) is one of the most notorious in this respect. They only stopped using talc (a mineral that has been found to contain traces of asbestos) in their Baby Talc sold in North America in 2020 and in that sold elsewhere in the world in 2023. As J&J continued to lose cases, they looked for ways to avoid their responsibility. One of these was to file for bankruptcy. 

The courts have just refused the bankruptcy filing for the second time

In 2021, Johnson and Johnson created a subsidiary company called LTL Management. They created it to try and separate any asbestos claims from the main company. In other words, claimants would need to file against LTL, rather than J&J. Only, they intended to stop people from claiming at all.

Next, they went to court to file for bankruptcy for the newly created company, offering an $8.9 settlement to settle the many unresolved asbestos claims. If successful it would have prevented anyone from coming forward with a new claim, even though there are likely many others out there who have contracted cancer due to using J&J Baby Talc.

Thankfully the court refused their initial bankruptcy application as did a second court when they tried again last month.

It goes to show the measures some companies will go to to avoid paying compensation to those they have harmed through asbestos exposure. It’s why getting appropriate legal help is crucial to take on these giants if you have suffered harm.