Committee Representing Talc-Related Cancer Victims Files a Motion Seeking Standing to Pursue a $30 Billion Fraudulent Conveyance Complaint

The Official Committee of the Talc Claimants seeks to avoid the transactions by which LTL gave away its largest asset prior to its second bad-faith bankruptcy filing

NEW YORK, May 11, 2023 /PRNewswire/ -- Today, the Official Committee of Talc Claimants ("TCC," "the Committee") filed a motion in the second bankruptcy case of LTL Management ("LTL," the "Debtor"), seeking standing to avoid what may be one of if not the largest fraudulent transfers in U.S. history. The TCC has already filed a motion to dismiss the case on the ground that, among other things, LTL cannot establish financial distress and, therefore, its second bankruptcy was not filed in good faith. The TCC's standing motion argues that if LTL is ultimately successful in establishing financial distress, it intentionally manufactured that distress by giving up contractual rights against its parent, Johnson & Johnson ("J&J"), worth billions of dollars. The TCC seeks standing to file a complaint to, among other things, avoid and recover that transfer for the benefit of all talc claimants, because "LTL is incapable of acting contrary to J&J's demands."

As the Third Circuit Court stated in its decision dismissing LTL's first bankruptcy petition, LTL's original 2021 Funding Agreement with J&J was "not unlike an ATM disguised as a contract" and provided LTL with sufficient funding to pay its talc liabilities inside or outside of the bankruptcy system. In an attempt to generate the appearance of financial distress, LTL replaced its 2021 Funding Agreement with an agreement worth tens of billions of dollars less. In its motion, the TCC states that "If LTL can prove that it is in financial distress, then it became distressed by committing fraud, and colorable claims exist to undo that fraud (and, therefore, the financial distress), as the Third Circuit recognized."

In its standing motion, the TCC also argues that if the 2021 Funding Agreement was "void or voidable" as the Debtor now contends, then the entire divisional merger that created the Debtor and assigned all of J&J's talc liability to it, is avoidable as a fraudulent transfer. "[A]ll roads lead to the same place—if LTL can somehow establish financial distress, then it necessarily follows that J&J orchestrated the largest fraudulent transfer in United States history, it is just a question of when."

The TCC's standing motion and complaint case can be viewed on the Case docket, available at: https://dm.epiq11.com/case/ltl/dockets.

About The Official Committee of Talc Claimants

The Official Committee of Talc Claimants (TCC), appointed by the Office of the United States Trustee (UST), an arm of the US Department of Justice, represents and acts as a fiduciary for all mesothelioma and ovarian cancer victims, as well as all subrogation claimants who have claims based on or derivative to the victims' talcum powder claims. For more information about the TCC please view our website at https://www.ltltalccommittee.org/

View original content:https://www.prnewswire.com/news-releases/committee-representing-talc-related-cancer-victims-files-a-motion-seeking-standing-to-pursue-a-30-billion-fraudulent-conveyance-complaint-301822845.html

SOURCE Official Committee of Talc Claimants