J&J Talc Bankruptcy Potentially Heading to New Jersey
On October 25, 2021, U.S. Bankruptcy Judge Craig Whitley of the U.S. Bankruptcy Court in the Western District of North Carolina, issued an order instructing a Johnson & Johnson (“J&J”) subsidiary to show cause why the case “should not be transferred to another judicial district where venue is proper.”
The subsidiary, LTL Management, LLC (“LTL”), was created in early October as part of a corporate restructuring. In the move, all liabilities associated with talc-related claims were transferred to LTL. Two days after formation in North Carolina (“NC”), LTL filed for Chapter 11 bankruptcy. The order notes that LTL acknowledges that the restructuring was executed to allow for LTL to “resolve talc-related claims through a chapter 11 reorganization” without exposing parent company J&J to the bankruptcy proceedings.
The Judge’s order identifies several reasons why NC may not be the proper venue, including but not limited to, that parent company J&J resides in New Jersey (“NJ”); LTL’s mailing address is a NJ address; and LTL’s employees reside in NJ. Additionally, nearly 35,000 tort claims, which account for 92% of the talc cases, are pending in New Jersey through a multi-district litigation entitled: In re: Johnson and Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation.
The Judge cited Federal Bankruptcy Rule 1014(a)(1), which grants authority to a court to transfer a case if more convenient for the parties or in the interest of justice.
The day before the Judge issued his order, a U.S. Bankruptcy Court Administrator filed a motion requesting the case be transferred to New Jersey, stating that the interest of justice would best be served there.
A show cause hearing will be held on November 10, 2021 in Charlotte, North Carolina in the Charles R. Jonas Federal Courthouse.
The bankruptcy administrator is represented by Shelley K. Abel.
LTL is represented by Jones Day.
The case is In re: LTL Management LLC, case number 21-30589, in the U.S. Bankruptcy Court for the Western District of North Carolina.
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