Product News and Recalls

Reuters Exposes Johnson & Johnson’s “Project Plato” Plan to Avoid Talc Asbestos Liability

Reuters exposes internal Johnson and Johnson Project Plato Plan“It is critical that any activities related to Project Plato, including the mere fact the project exists, be kept in strict confidence.” ~ Chris Andrew, attorney for Johnson & Johnson

Project Plato was the internal code name given within Johnson & Johnson to its plan to conduct a Texas two-step bankruptcy, or what is more technically known as a “divisive merger,” to redirect plaintiffs’ talc asbestos lawsuits away from J&J and toward a bankrupt company. The plan used legal maneuvering to spin a new company off from J&J. Once created, the new company was saddled with the entirety of J&J’s talc liability and then immediately declared to be bankrupt.

J&J named its new company LTL Management LLC and put Robert Wuesthoff; merely a manager within J&J itself, at its head as company president. According to Reuters’ reporting, the rest of the plan was as easy to execute as filing some paperwork. LTL Management LLC “then merged with J&J’s existing consumer products business. The merged company then divided itself under [Texas’] divisional merger law, creating the subsidiary that would take on all the talc liability. The consumer business could then go on as if the lawsuits had never been filed.”

Records indicate significant concern within J&J over “negative publicity” once news of the maneuver went public, but nothing was more important to J&J executives than its finances. While considering the strategies it could use to avoid compensating tens of thousands of plaintiffs with claims of mesothelioma and various cancers brought about by the asbestos in the company’s talc products, J&J treasurer Michelle Ryan emailed corporate credit ratings firm Moody’s to discuss how a Texas two-step bankruptcy might affect J&J’s credit score.

It is worth reminding our readers that despite the company’s countless denials on the public stage, privately J&J knew about the presence of asbestos in its talc for decades on end. And while it went to great lengths to conceal that fact – yes, fact – from regulators as well as the general public, that level of evil pales in comparison to something as diabolical as Project Plato.

The move is now under judicial review. Additionally, J&J has filed for a temporary restraining order against Reuters to try to stop the news organization from publishing additional internal communications it might have received regarding Project Plato while simultaneously repeating its refrain that its talc products do not contain asbestos or cause cancer.