Johnson & Johnson wins a key court battle in baby powder case

https://www.npr.org/2022/02/25/ [login to see] /johnson-johnson-wins-court-battle-bankruptcy-baby-powder
A federal judge has allowed a company spun off by Johnson & Johnson to proceed with a controversial bankruptcy, despite complaints from thousands of people who say they were harmed by the consumer product giant's baby powder and who could now be denied a chance to sue.

J&J created the spinoff company, LTL Management, under a Texas law last fall, while facing some 38,000 lawsuits from people who say its baby powder was contaminated with asbestos, causing cancer and other ailments.

J&J, which also makes products such as Tylenol and Band-Aid, assigned legal liability for the complaints to the spinoff company, which immediately filed for bankruptcy — a maneuver dubbed the "Texas two-step."

Critics challenged the bankruptcy as a bad-faith effort to shield J&J itself from responsibility for an allegedly harmful product.

"The bankruptcy code was never intended to be abused in this way by massively profitable corporations as a means to delay or prevent cancer victims from having their day in court," said Jon Ruckdeschel, an attorney who represents some of the people pursuing J&J.