Johnson & Johnson is making a third attempt to settle the flimsy claims that its talc products caused cancer. J&J denies the allegations, and they are medically unfounded, but it faces over 62 000 claims. At this point, they are just trying to make them go away.
The company's strategy, informally known as the "Texas two-step," involves shifting the claim liabilities to a subsidiary, which then files for Chapter 11 to push for a global settlement and stop future lawsuits. Despite legal challenges and opposition, J&J secured over 75% support from claimants for its $10 billion settlement, increasing its chances of success this time.
The settlement has divided lawyers, with some supporting it as fair, while others argue that J&J is using this strategy to avoid paying full compensation, whatever that might be. These "ambulance chasers" are driven by greed.
The bankruptcy settlement tactic being used here has its critics, and is threatened by recent court rulings and potential legislation. Let's see how this unfolds. Keep in mind that J&J has a market value of nearly $400 billion, so spending $10 billion to settle this mess isn't a dealbreaker.