J&J unit third bankruptcy attempt location to be determined by Texas judge

A federal court judge in Texas will determine whether a Johnson & Johnson (NYSE:JNJ) unit’s request to file for bankruptcy as a way to settle talc claims will take place in the Lone Star State or New Jersey.

On Tuesday, New Jersey U.S. Bankruptcy Court Judge Michael Kaplan — who oversaw another J&J’s unit prior unsuccessful attempts to use the “Texas two-step” bankruptcy strategy — declined to take over the filing from Red River Talc.

On Monday, Texas U.S. Bankruptcy Court Judge Christopher Lopez said he would hold a hearing next week to determine where arguments on the latest filing should take place. He could decide to have Kaplan handle it.

Red River Talc made its filing in Texas on Sept. 20 and is offering ~$8B to be paid over 25 years to resolve claims that allege its talc-based products caused cancer.

Separately, lawyers representing some talc plaintiffs filed documents in Texas Monday saying that the bankruptcy filing goes against U.S. Supreme Court precedent and perverts the intention of the bankruptcy system, Bloomberg reported.

That precedent, reached in June, overturned Purdue Pharma’s bankruptcy attempt to resolve opioid claims. The ruling found that a bankruptcy settlement does not release an entity from claims without the consent of all claimants.