A Bailey Glasser trial team heads to court today in Texas to contest the third attempt by Johnson & Johnson to deny people injured by its talc products their day in court as guaranteed by the United States Constitution. Our team in Texas is being led by founding partner Brian A. Glasser, Mass Tort Practice Group Leader David L. Selby, Electronically Stored Information Practice Group Leader Katherine E. Charonko, and litigator Elizabeth L. Stryker. Additional members of the BG team includes Bankruptcy Practice Group Leader Jonathan Gold, partner D. Todd Mathews, and of counsel Thomas B. Bennett, and our co-counsel includes the firms of Otterbourg P.C. and Lawson & Moshenberg PLLC.
In this third bite at the bankruptcy apple, J&J subsidiary Red River Talc LLC is attempting to use the “Texas two-step” strategy, which is when a company splits itself, assigns liabilities to a newly created entity, and places that entity into bankruptcy to address claims involving asbestos-contaminated talc. J&J’s prior two talc liability spin-offs had their Chapter 11 cases dismissed as bad faith filings.
In 2022, J&J attempted its first “Texas two-step” Chapter 11 in New Jersey. The U.S. Court of Appeals for the Third Circuit dismissed that case, finding the spinoff wasn’t actually financially distressed and didn’t qualify for Chapter 11. Relying on the Third Circuit’s ruling, a New Jersey bankruptcy court tossed J&J’s second talc spinoff bankruptcy last year. Now J&J is taking another run at bankruptcy protection in what it perceives to be a more friendly Texas bankruptcy court.
Our team represents the Coalition of Counsel for Justice for Talc Claimants before the U.S. Bankruptcy Court for the Southern District of Texas. The case is In re: Red River Talc LLC, case number 4:24-bk-90505, in the U.S. Bankruptcy Court for the Southern District of Texas.