Johnson & Johnson brace for reorganization votes showdown with former talc supplier


A bottle of Johnson and Johnson Baby Powder is seen in an illustrative photo taken in New York City. REUTERS / Mike Segar

  • J&J says votes were improperly traded after deadline
  • Group of personal injury claimants defend voting changes
  • Votes are the key to the reorganization of Imerys Talc

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(Reuters) – Johnson & Johnson will urge a judge on Monday to disqualify some votes in favor of a reorganization plan proposed by its former talc supplier, saying the votes were inappropriately altered in an attempt to gain needed support creditors for the deal.

The dispute is the latest between the pharmaceutical giant and Imerys Talc America, which filed for bankruptcy in February 2019 to process around 15,000 lawsuits alleging its products caused ovarian cancer and asbestos-related mesothelioma. As Imerys, represented by Latham & Watkins, tries to push forward a plan that would allow it to close bankruptcy and create a trust to compensate bodily injury claimants, J&J opposed the deal, saying Imerys is trying to make it easier for cancer victims to sue J&J instead.

J&J, represented by Weil Gotshal & Manges in the Imerys Chapter 11 case, has long denied any wrongdoing in response to a dispute over its talc-based products. Reuters reported this summer that the company explored the possibility of turning its talcum liabilities into a new entity and bankrupting that entity.

J&J called on US bankruptcy judge Laurie Selber Silverstein to cast more than 15,000 votes on the plan cast by the law firm Bevan & Associates on behalf of the personal injury claimants. Over 80,000 votes were cast in total. The motion was filed under seal, but J&J on Thursday submitted a publicly available document indicating that Bevan’s votes were changed after the plan’s voting deadline.

J&J maintains that the votes were changed in favor of the plan after the official Imerys Liability Plaintiff Committee, represented by Robinson & Cole, contacted Bevan when they realized there was no not enough favorable votes to meet the threshold required by bankruptcy law.

Supporters of the plan want to “bury their heads in the sand and exclaim that everyone should just move on because there is nothing to see here, a vote is a vote,” J&J said in Thursday’s record.

J&J also argued that Bevan’s claimants had no reason to support the plan since most of them do not have ovarian cancer or mesothelioma claims and therefore are not eligible for some. trust review process. But the tort plaintiffs committee said any talc claim, even if it is unlikely to be paid, is allowed to vote because its rights will be compromised.

Bevan said in court documents that “no promises or inducements” were offered to the company’s claimants in exchange for their votes.

J&J also called for the disqualification of nearly 500 votes submitted by another company, Williams Hart Bundas Easterby, claiming that this company was wrongly offered a seat on the Trust Advisory Board in exchange for changing its votes.

The tort plaintiffs committee defended the voting changes, saying in court documents that its members had contacted Bevan and Williams Hart for “good faith communications” about plaintiffs’ concerns about the plan. The committee also said Bevan’s claimants initially voted against the plan due to a misreading of certain provisions.

The committee called J&J’s efforts to reject the votes as “conspiracy theories and innuendo.”

Representatives for J&J did not immediately respond to requests for comment. An Imerys representative declined to comment.

Imerys, formerly the American arm of the French group Imerys SA, was sold to Magris Resources Canada for $ 223 million in 2020. This proceeds will go to a trust which, under the plan proposed by the company, will pay the claims for injury.

The case is In re Imerys Talc America Inc., US Bankruptcy Court, District of Delaware, No. 19-10289.

For Imerys: Jeffrey Bjork, Kimberly Posin, Helena Tseregounis and Richard Levy from Latham & Watkins and Mark Collins, Michael Merchant, Amanda Steele and Brett Haywood from Richards Layton & Finger

For Johnson & Johnson: Diane Sullivan, Gary Holtzer, Ronit Berkovich and Theodore Tsekerides from Weil Gotshal & Manges, and Patrick Jackson from Faegre Drinker Biddle & Reath

For the Crime Committee: Natalie Ramsey, Mark Fink and Michael Enright of Robinson & Cole, Rachel Strickland, Jeffrey Korn, Dan Forman and Stuart Lombardi of Willkie Farr & Gallagher and Kami Quinn and Heather Frazier of Gilbert

Read more:

US judge refuses to prevent J&J from separating talcum liability from core business

EXCLUSIVE – J&J plans to bankrupt talc liabilities

The vote on the reorganization plan of Imerys Talc modifies the confusion and causes bankruptcy

Maria chutchian

Maria Chutchian reports on bankruptcies and corporate restructurings. She can be reached at [email protected].

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