MISSOURI CIRCUIT COURT

TWENTY-SECOND JUDICIAL CIRCUIT

(CITY OF ST. LOUIS)

VICTORIA LYNN GIESE, ANGELA

TRENTMANN, AND SUSAN VOGELER,

Plaintiffs,

v.
EMERGENCY MOTION FOR
JOHNSON & JOHNSON TEMPORARY RESTRAINING ORDER
AND PRELIMINARY INJUNCTION
Serve: Steven M. Rosenberg
Registered Agent Case No. __
One Johnson & Johnson Plaza
New Brunswick, NJ 08933
and

JOHNSON & JOHNSON CONSUMER, INC.

Serve: CSC- Lawyers Incorporating Service

Company
221 Bolivar Street
Jefferson City, MO 65101

Defendants.

PRELIMINARY STATEMENT
Plaintiffs, all victims of J&J’s carcinogenic talc products, bring this emergency motion to

stop J&J 1 from carrying out an unlawful and improper corporate restructuring that would deprive

Plaintiffs of their day in court as well as the just compensation these innocent women are owed for

the grievous harm J&J has caused them.

1
As used in this Motion, the term “J&J” includes both Johnson & Johnson (“J&J Global”), the
publicly traded multinational corporation, and Johnson & Johnson Consumer, Inc. (“JJCI”), a
subsidiary of J&J Global, and Other J&J Entities as defined in the accompanying Petition.
1
 As set forth below and in the accompanying Petition, J&J has been scheming for months

to engage in a so-called “Texas Two-Step”—a corporate-law shell game that would allow this

corporate behemoth, valued at nearly half a trillion dollars, with record-breaking recent profits, to

shield its enormous assets from ever being used to provide relief to these Plaintiffs and the tens of

thousands of other women who have fallen victim to J&J’s talc. With the Texas Two-Step, J&J

would spin off a new corporate shell entity (hereinafter “BadCo”); funnel its talc-related

liabilities—but not its assets—into BadCo; and then put the liability-laden BadCo into bankruptcy.

Meanwhile, the bulk of J&J’s productive assets—which could satisfy the company’s talc liabilities

several times over—would remain safely sequestered in a separate entity (“NewCo”), 2 leaving J&J

free to continue doing its (highly lucrative) business as usual.

The effect, if J&J is able to go forward with its plans? Most, if not all, of its assets would

be shifted away from its mounting talc liabilities, which would be left in BadCo, a vastly

underfunded corporate shell. BadCo’s bankruptcy petition would bring to a screeching halt the

cases that Plaintiffs and other victims of J&J’s talc have fought for years to present to a jury of

their peers. A complex and protracted bankruptcy proceeding would result in a single bankruptcy

judge issuing a generalized and blanket conclusion about how much talc claims are worth for

purposes of determining plan feasibility and voting—an amount that, in all likelihood, would result

in J&J paying mere pennies on the dollar for the injuries caused it has caused. All the while, these

Plaintiffs and the tens of thousands of other women who unwittingly used J&J’s deadly product

would continue to suffer, and in many cases die, with little hope of ever receiving real justice.

2
Depending on how the transaction is structured, NewCo or BadCo could be an existing J&J
entity.
2
 Until recently, the possibility that J&J would try this maneuver was only rumored—at most

a threat used by the company to coerce plaintiffs to accept low-ball settlement offers. Now,

however, J&J has made clear that the threat is in fact very real. When news outlets reported in

recent weeks that J&J plans to offload its talc liabilities into a newly created entity that would file

for bankruptcy, J&J could have denied any such intent. It did not, commenting only that it had not

yet “decided on any particular course of action.” 3 When asked by a Georgia state-court judge

presiding over another upcoming talc trial whether it was true J&J had hired Jones Day, a high-

powered corporate-defense firm, to effectuate its restructuring plan, J&J’s lawyer refused to

answer, insisting “I absolutely cannot make any comment.” 4

Most recently, an official creditor committee in the bankruptcy of Imerys, a company

which supplied talc to J&J for decades, filed an emergency motion in Imerys’s bankruptcy

proceeding, asking the court to forbid J&J from using a Texas Two-Step to try to shirk its

obligation to indemnify Imerys. In the hearing on that motion, J&J made clear that the company

was indeed considering a Texas Two-Step, while vaguely committing to maintain the “status quo”

pending an August 24 hearing on the Imerys creditor committee’s motion. 5 Notably, J&J counsel

3
See, e.g., Ex. 25, Mike Spector, Jessica Dinapoli & Dan Levine, J&J exploring putting talc
liabilities into bankruptcy, Reuters (July 19, 2021), https://www.reuters.com/business/healthcare-
pharmaceuticals/exclusive-jj-exploring-putting-talc-liabilities-into-bankruptcy-sources-2021-07-
18/ (stating that J&J had “not decided on any particular course of action in this litigation” and then
“declin[ing] further comment”). All exhibits referenced in this Motion are attached to the
accompanying Petition.
4
Ex. 31, Transcript, Monroe v. Johnson & Johnson, Civ. 2018RCSC01222 (July 27, 2021) at 33:9-
10.
5
See also Ex. 34, Transcript of Video Hearing, In re: Imerys Talc America, 19-10289 (July 29,
2021) at 11-14.

3
acknowledged that whether this planned course of conduct would constitute “a fraudulent

conveyance” could be addressed in later proceedings. 6

As set forth below and in the accompanying Petition, the asset shifting necessary for J&J

to effectuate the foregoing scheme violates numerous provisions of the Missouri’s Uniform

Fraudulent Transfer Act. Plaintiffs are simultaneously filing that Petition to permanently enjoin

that unlawful conduct. In the meantime, temporary emergency relief, in the form of a Temporary

Restraining Order (“TRO”) and Preliminary Injunction, is necessary to ensure that J&J cannot

improperly separate its talc liabilities away from the assets needed to fully satisfy those liabilities

before the Petition can be adjudicated. 7 If J&J is able to proceed with those fraudulent transfers,

it could put the liability-laden BadCo into bankruptcy at its convenience, and Plaintiffs would, in

all probability, wind up vastly undercompensated for the very real, concrete, and present injuries

they now suffer.

To be clear, Plaintiffs do not seek to limit any J&J entity from filing for bankruptcy. What

they seek is to block J&J from making fraudulent transfers before seeking the protection of the

bankruptcy laws and thereby depriving talc victims of the compensation they justly deserve.

Unlike a bankruptcy filing on its own, that shifting of assets and liabilities is plainly illegal and

should be prohibited.

For a company with a market capitalization of nearly $500 billion and a credit rating

rivaling that of the U.S. government to use asset-shifting shell games to stiff-arm injured tort

victims is a true perversion of the system, one that this Court should not permit. At a bare

6
Ex. 27, Johnson & Johnson Agrees to Standstill Over Talc Bankruptcy Dispute, WSJ (July 29,
2021), https://www.wsj.com/articles/johnson-johnson-agrees-to-standstill-over-talc-bankruptcy-
dispute-11627602019.
7
As explained in more detail here and in the Petition, Plaintiffs are also seeking an order avoiding
any past fraudulent transfers that the J&J entities have executed in the recent past.
4
minimum, a TRO and Preliminary Injunction are necessary to protect the status quo while

Plaintiffs pursue their claim that the transfers J&J plans are an outrageous abuse of the judicial

process. See e.g., Est. of Hutchison v. Massood, 494 S.W.3d 595, 604 (Mo. Ct. App. 2016) (A

preliminary injunction is “available . . . to preserve the status quo and prevent irreparable injury to

the plaintiff pending the disposition of a case on its merits.”).

FACTUAL BACKGROUND
The factual background is set forth in the accompanying Petition. To avoid repetition,

Plaintiffs incorporate by reference all allegations and exhibits from the Petition. The most critical

factual allegations will be highlighted in the argument section below.

ARGUMENT
“There are ‘three permissible phases’ in an injunction proceeding: (1) a temporary

restraining order granted against a defendant with or without notice or hearing; (2) a temporary

injunction granted after notice and hearing; and (3) a permanent injunction granted after a final

disposition on the merits of the case.” St. Louis Tele-Commc’ns, Inc. v. People’s Choice TV of St.

Louis, Inc., 955 S.W.2d 805, 807 (Mo. Ct. App. 1997). Under Missouri Rule 92.02(a), a court

may issue a temporary restraining order if “the party seeking relief demonstrates that immediate

and irreparable injury, loss, or damage will result in the absence of relief.” Mo. R. 92.02(a)(1). 8

Under Rule 92.02(c), a court may issue a temporary restraining order so long as “the party against

whom relief is sought is given prior notice and an opportunity to be heard.” Mo. R. 92.02(c)(1).

The standards for issuing a temporary restraining order and a preliminary injunction are essentially

8
As the advisory committee notes indicate, this paragraph “is the same as Fed. R. Civ. P. 65(a).”
1981 Adv. Comm. Notes to Rule 92.02. As a result, this Motion will include citations to federal
cases interpreting this provision where appropriate.
5
the same. See, e.g., S.B. McLaughlin & Co. v. Tudor Oaks Condo. Project, 877 F.2d 707, 708 (8th

Cir. 1989).

“The purpose of [a temporary restraining order or preliminary injunction] is to preserve the

status quo until the trial court adjudicates the merits of the claim for a permanent injunction.” Cook

v. McElwain, 432 S.W.3d 286, 292 (Mo. Ct. App. 2014). “The issuance of a preliminary

injunction—and its continued necessity over the course of the litigation—depends on the

likelihood of success at trial and the threat of irreparable harm in the meantime.” State ex rel.

Koster v. Didion Land Project Ass’n, LLC, 469 S.W.3d 914, 918 (Mo. Ct. App. 2015); see also

Impey v. Clithero, 553 S.W.3d 344, 354 (Mo. Ct. App. 2018) (“In Missouri, a preliminary

injunction requires, in part, that the movant show a likelihood of success on the merits.”).

Thus, “[w]hen considering a motion for a preliminary injunction,” a court should weigh

four factors: (1) “the movant’s probability of success on the merits”; (2) “the threat of irreparable

harm to the movant absent the injunction”; (3) “the balance between this harm and the injury that

the injunction’s issuance would inflict on other interested parties”; and (4) “the public interest.”

State ex rel. Dir. of Revenue, State of Mo. v. Gabbert, 925 S.W.2d 838, 839 (Mo. 1996); see also

Minana v. Monroe, 467 S.W.3d 901, 907 (Mo. Ct. App. 2015). Each of these factors weighs in

favor of granting a temporary restraining order and preliminary injunction here, especially given

that the Missouri Uniform Fraudulent Transfer Act explicitly provides for exactly this kind of

equitable relief. See RSMo. § 428.039(1)(3)(a) (“[In a fraudulent-conveyance action], a creditor

. . . may obtain . . . [a]n injunction against further disposition by the debtor or a transferee, or both,

of the asset transferred or of other property.”)

6
 I. Plaintiffs Have Demonstrated a Probability of Success on the Merits of Their
Request for a Permanent Injunction.
In their Petition, Plaintiffs have asked for a permanent injunction to prevent J&J from

making fraudulent transfers, and Plaintiffs are, at a minimum, reasonably likely to succeed in

obtaining such an injunction. The Missouri Uniform Fraudulent Transfer Act defines a transfer as

“fraudulent as to present and future creditors” in multiple types of circumstances relevant here.

RSMo. § 428.024. First, a transfer is fraudulent as to present and future creditors “if the debtor

made the transfer or incurred the obligation . . . with actual intent to hinder, delay, or defraud any

creditor of the debtor.” RSMo. § 428.024(1)(1). Second, a transfer is fraudulent (as to present and

future creditors) if the debtor is under-capitalized and “the debtor made the transfer or incurred the

obligation” “without receiving a reasonably equivalent value in exchange for the transfer or

obligation.” RSMo. § 428.024(1)(2). Third, a transfer is fraudulent as to present (but not future)

creditors if it is made “without receiving a reasonably equivalent value in exchange for the transfer

or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result

of the transfer or obligation.” RSMo. § 428.029(1).

Each prong is independently satisfied here.

First, as for “actual intent to . . . hinder [and] delay” payments to talc victims like these

Plaintiffs, even the press reports make clear that this is J&J’s true intent. A recent Wall Street

Journal article on J&J’s plans notes that “[a] bankruptcy filing by a J&J subsidiary would halt

pending lawsuits”; that in connection with that filing, J&J planned to “split the talc-related

liabilities of its Johnson & Johnson Consumer Inc. unit away from income-producing assets” (i.e.,

to shield those assets from being used to pay talc victims like Plaintiffs); that this tactic “would

pressure [talc] claimants to accept lower settlements, since they could otherwise be stuck in

7
bankruptcy court for years, with no chance of advancing their claims elsewhere,” and that J&J is

likely using this maneuver “as a threat to coerce settlements.” 9

J&J has made its true intentions even more clear over the past few months during settlement

discussions with lawyers working on behalf of injured talc victims. During these discussions, J&J

has routinely been “threatening bankruptcy” “[a]s a threat to force acceptance of a parsimonious

offer [of settlement]. 10 As a result, there is little question that J&J’s intent is to use this corporate

reorganization to harm talc victims. After all, unless the Texas Two-Step advantaged JJCI and

J&J Global (and harmed their creditors), there would be no reason for the machinations at all—

and no force behind the threats that J&J has been making.

Moreover, the Missouri Uniform Fraudulent Transfer Act lists several “badges of fraud”

that indicate that a certain transfer is being undertaken with actual intent to hinder, delay, or

defraud a debtor’s creditors. Several of those fraud badges are on prominent display here. J&J

Global and JJCI (plus NewCo and BadCo) are all corporate affiliates of one another, and thus any

transfers of assets and liabilities between these entities amounts to a transfer among “insiders.”

RSMo. § 428.024(2)(1); RSMo. § 428.009(7)(d). There is no question that J&J Global and JJCI

had each “been sued or threatened with suit” on tens of thousands of occasions by talc victims.

RSMo. § 428.024(2)(4). By creating NewCo and BadCo, the restructuring will by design transfer

“substantially all the debtor’s assets” into NewCo. RSMo. § 428.024(2)(5). There is little doubt

that assets would be “removed [and] concealed” via the restructuring. RSMo. § 428.024(2)(7).

9
Ex. 24, How Bankruptcy Could Help Johnson & Johnson Corral Vast Talc Litigation, Wall Street
Journal (July 20, 2021) https://www.wsj.com/articles/how-bankruptcy-could-help-johnson-
johnson-corral-vast-talc-litigation-11626773400.
10
Ex. 23, Johnson & Johnson Litigation Update, Mass Torts Nexus (April 15, 2021),
https://www.masstortnexus.com/News/5467/Johnson-And-Johnson-Litigation-Update.

8
And as explained below, BadCo and JJCI were both “insolvent or became insolvent shortly after

the transfer was made or the obligation was incurred.” RSMo. § 428.024(2)(9). In sum, at a bare

minimum, Plaintiffs have at least demonstrated a “probability of success” in proving that J&J’s

true intent is to harm its talc-victim creditors. Koster, 469 S.W.3d at 918. And that probability is

all that is required to satisfy this prong of the Preliminary Injunction/Temporary Restraining Order

standard. See id.

Second, Plaintiffs are also reasonably likely to succeed in demonstrating that J&J’s conduct

amounts to a fraudulent transfer under the second prong of the Missouri Uniform Fraudulent

Transfer Act discussed above—the prong forbidding transfers by under-capitalized entities in

exchange for less than reasonably equivalent value. See RSMo. § 428.024(2). As has been

reported, J&J’s plan is to “us[e] Texas’s ‘divisive merger’ law” to “create a new entity housing

talc liabilities” (but not J&J’s valuable assets) and then use that entity to “file for bankruptcy to

halt litigation.” 11 That “new entity,” BadCo, in essence a shell corporation, will by design not

have substantial assets—but will be solely liable for all of J&J’s talc-related liabilities. As a result,

BadCo will have “remaining assets [that are] unreasonably small in relation to” the transaction

saddling it with liabilities. RSMo. § 428.024(1)(2)(a). It will also have “debts beyond [its] ability

to pay as they bec[o]me due.” RSMo. § 428.024(1)(2)(b). After all, BadCo will not have

substantial assets but will be taking on talc-related liabilities fairly valued in the tens of billions of

dollars. That amounts to extreme under-capitalization.

Under the terms of the Missouri Uniform Fraudulent Transfer Act, companies in that kind

of under-capitalized situation are subject to even more exacting restrictions on their ability to

11
Ex. 25, J&J exploring putting talc liabilities into bankruptcy, Reuters (July 19, 2021),
https://www.reuters.com/business/healthcare-pharmaceuticals/exclusive-jj-exploring-putting-
talc-liabilities-into-bankruptcy-sources-2021-07-18/
9
transfer assets or incur liabilities. Specifically, such companies may not incur any “obligations”

unless they receive “reasonably equivalent value in exchange.” RSMo. § 428.024(1)(2). By

design, BadCo will hardly receive reasonably equivalent value in exchange for accepting J&J’s

talc-related liabilities. As of July 29, 2021, there were 34,600 talc-related cases presently pending

against J&J. 12 And “just one suit with 22 claimants resulted in an award”—which J&J has now

paid in full—“of $2.12 billion,” an average of nearly $100 million per plaintiff. 13 Thus, even at a

significant discount, those talc-related liabilities are fairly valued in the tens of billions of dollars.

See Accompanying Petition at 10-14 (detailing the scope of present and future talc liabilities). As

has been reported, however, the new shell company, BadCo, will not receive tens of billions of

dollars in assets in exchange for taking on those tens of billions of dollars in liabilities.

The entire purpose of the Texas Two-Step procedure is to separate the liabilities of J&J

from the assets that would be needed to pay for those liabilities on a fair basis. As a result, the

threatened Texas Two-Step—or other transfer of assets and liabilities between the various J&J

entities—amounts to a fraudulent transfer under this prong of the Missouri Uniform Fraudulent

Transfer Act as well. At a bare minimum, Plaintiffs have demonstrated at least a “probability of

success” on the merits under this prong of the Missouri Uniform Fraudulent Transfer Act.

Third, for similar reasons, Plaintiffs are reasonably likely to succeed in showing that the

planned reorganization will involve a transfer made “without receiving a reasonably equivalent

value in exchange” by an entity that was “insolvent.” RSMo. § 428.029(1). As explained above,

BadCo will be saddled with all of J&J’s talc-related liabilities (fairly estimated in the billions of

12
Ex. 6, Johnson & Johnson SEC Form 10-Q (July 29, 2021), https://johnsonandjohnson.gcs-
web.com/static-files/df3c7e07-e815-4c6d-843e-ff06c72b41e5 at 29.
13
Ex. 30, How Johnson & Johnson could use the "Texas two-step" to cap its baby powder
liabilities, Axios (July 22, 2021), https://www.axios.com/johnson-and-johnson-baby-powder-
bankruptcy-dec4874c-e02b-4076-817d-83de74d6196c.html
10
dollars) but few of its productive assets. BadCo will thus undoubtedly be “insolvent,” with

liabilities far exceeding its assets, either immediately upon creation or “as a result of” incurring

the talc-related liabilities. RSMo. § 428.029(1). As likewise explained above, by the very design

of the reorganization, BadCo will not receive assets that are of “reasonably equivalent value” to

the talc-related liabilities in “in exchange” for taking on those liabilities. Hence the reorganization

amounts to a fraudulent transfer under this prong of the Missouri Uniform Fraudulent Transfer Act

as well.

Finally, Plaintiffs have demonstrated a reasonable probability of success on their claim

seeking to avoid any past asset transfers (especially in the form of dividends) that JJCI has made

to its parent company J&J Global other corporate entities in the J&J family of companies

(hereinafter “Other J&J Entities”) that received assets from JJCI (including dividends) after JJCI

became insolvent, became insufficiently capitalized in relation to its business, or incurred debts

beyond its ability to pay as they come due. As explained above, there are currently tens of

thousands of talc-related claims pending against JJCI. And as explained in the accompanying

Petition seeking a permanent injunction, these claims are fairly valued in the tens of billions of

dollars. Although J&J Global is certainly well capitalized enough to pay that liability, with its

market cap in excess of $400 billion, its subsidiary JJCI has a net worth of just $14 billion. 14 As

a result of its talc-related liabilities therefore, JJCI is (and has been) insolvent. JJCI had “assets

[that were] unreasonably small in relation to the” asset transfers. RSMo. § 428.024(2). And JJCI

“believed or reasonably should have believed that [it] would incur debts beyond [its] ability to pay

as they became due.” Id. Thus, when JJCI transferred assets to J&J Global or Other J&J Entities

14
See, e.g., Ex. 37, Stipulation, Brower v. Johnson & Johnson, et al., 16EV005534 (Fulton County
Court, Georgia) (Sept. 27, 2019) (“Based on year-end data, the current net worth of Johnson &
Johnson Consumer Inc. (“JJCI”) is approximately $14.092 billion.”).
11
(including via dividends) without receiving “reasonably equivalent value in exchange,” JJCI

violated the Missouri Uniform Fraudulent Transfer Act. RSMo. § 428.024(2).

At a bare minimum, Plaintiffs have demonstrated a reasonable probability that they will

succeed in demonstrating that JJCI violated the Missouri Uniform Fraudulent Transfer Act.

Because that Act specifically authorizes courts to avoid such transfers, attach assets, and

implement other provisional remedies to cure such fraudulent transfers, RSMo. § 428.039,

Plaintiffs have shown a reasonable probability of success on this fraudulent-transfer claim as well.

II. Plaintiffs Will Suffer Irreparable Harm If the Court Does Not Enjoin J&J from
Two-Stepping or Otherwise Transferring Its Liabilities.
Plaintiffs will suffer irreparable harm if J&J is permitted to engage in the Texas Two-Step

or otherwise separate its talc-related liabilities from its sizable assets. These Plaintiffs are about

to proceed to trial (in September 2021) against JJCI and J&J Global to recover damages for the

injuries that they sustained after using J&J’s products. Historically, these kinds of trials have

routinely resulted in verdicts in the hundreds of millions of dollars for each plaintiff—verdicts that

have been affirmed on appeal all the way up to the U.S. Supreme Court. 15

The question is what will happen in the likely event that these Plaintiffs prevail, secure a

large verdict against JJCI and J&J Global, and receive a judgment in their favor. If J&J is enjoined

from transferring its liabilities in an effort to shield its assets, J&J will be able to satisfy the

judgments against it, and these Plaintiffs will be made whole for their injuries, receiving the

compensation to which they are justly entitled under the law.

If, instead, J&J is not enjoined from transferring its liabilities, J&J’s assets will be shielded

from the judgment, leaving these Plaintiffs with no (or far reduced) recourse for their damages.

15
See Ingham v. Johnson & Johnson, 608 S.W.3d 663 (Mo. App. E.D., 2020) cert. denied 2021
WL 2194948, at *1 (2021).
12
Once the corporate restructurings are completed, this harm cannot be undone. J&J will have

successfully uncoupled its liabilities from its assets, leaving it free to continue conducting its

highly lucrative business operations unencumbered by its talc liabilities, and leaving these

Plaintiffs with the task of trying to seek recovery from BadCo, an under-capitalized shell

corporation, via the lengthy and uncertain bankruptcy process. While J&J itself admits that a Texas

Two-Step could ultimately be challenged after the fact as a fraudulent transfer, 16 execution of

such a transaction would allow J&J to create facts on the ground in litigation that would enable it

to threaten years of protracted litigation over the fraudulent transfer and use that threat to extract

a settlement for cents on the dollar from creditors. For Plaintiffs on the eve of trial, that is

irreparable harm. At a bare minimum, these Plaintiffs have at least demonstrated a “threat” of

irreparable harm, which is all the relevant standard requires. State ex rel. Dir. of Revenue, 925

S.W.2d at 839.

Similarly, Plaintiffs will suffer irreparable harm if this court does not avoid the fraudulent

transfers that JJCI has already made to J&J Global and/or Other J&J Entities in the form of

dividends and other transfers of assets not made in exchange for reasonably equivalent value.

These Plaintiffs are on the verge of securing sizable verdicts against JJCI. In order to satisfy those

judgments, JJCI will need access to substantial assets. To the extent J&J Global and/or Other J&J

Entities are allowed to keep the assets that JJCI has fraudulently transferred to them, that will

diminish (and perhaps prevent) JJCI’s ability to pay judgments that it will lawfully owe to these

Plaintiffs. Emergency relief is warranted to prevent that kind of irreparable harm to the Plaintiffs.

16
See Ex. 2, Defendants’ Objection to Motion of Official Committee of Tort Claimants and Future
Claimants’ Representative for Preliminary Injunction, In re: Imerys Talc America, Inc. et al., No.
21-51006, Dkt. 33 at 20.
13
III. The Balance of Hardships Weighs in Plaintiffs’ Favor.
For similar reasons, Plaintiffs have demonstrated that the balance of hardships weighs in

their favor. On one side of the scale, if J&J is permitted to transfer its liabilities in order to shield

its assets—and maintain the fraudulent transfer of assets that it has already executed—Plaintiffs’

ability to recover for their injuries will be diminished, delayed, or eliminated outright. On the

other side of the scale, if J&J is enjoined from executing these fraudulent transactions, what will

happen? J&Js will simply be required to pay for damages that it caused and satisfy liabilities that

it lawfully owes. If J&J still wishes to file for bankruptcy, it may, but the entity filing for

bankruptcy will have both J&J’s assets and liabilities, not just the liabilities.

Meanwhile, entering an injunction against J&J would cause no harm to J&J if its intentions

are pure. If J&J is not actually intending to execute the Texas Two-Step (or similar

reorganization), then the injunction would have no effect at all. Nor is there any legitimate

business objective of any kind that would be stifled by entering this injunction. There is no reason

at all—apart from a desire to secure relief from talc liabilities on coercive terms—for any J&J

entity to reincorporate in Texas before splitting into a BadCo and a NewCo. The balance of

hardships is thus entirely one-sided in Plaintiffs’ favor.

IV. The Public Interest Is Served by the Issuance of an Injunction to Prevent

Implementation of the Texas Two-Step Process or Other Corporate Transaction.
Finally, the public interest weighs in favor of protecting these injured Plaintiffs and

preventing J&J from using a divisive merger or other corporate transaction to shield itself from

liabilities which it legally is obligated to pay. See In re SK Foods, L.P., No. 09-29162-D-11, 2011

WL 10723414, at *36 (Bankr. E.D. Cal. Oct. 11, 2011) (“[I]t is certainly in the public interest to

prevent fraudulent transfers of assets for the purpose of avoiding the claims of creditors.”). The

public interest would in no way be benefited—and would almost self-evidently be harmed—by

14
allowing well-capitalized companies like J&J to cleanse themselves of liabilities that they lawfully

owe. The same is true for the fraudulent transfer of assets that JJCI has already performed—there

is no public interest in letting those assets remain out of the reach of the Plaintiffs and in the coffers

of J&J Global or Other J&J Entities. To understate the point, the public has little interest in

protecting the assets of companies with nearly half-trillion-dollar market capitalizations when that

protection comes at the expense of injured tort victims like these Plaintiffs.

CONCLUSION
For the foregoing reasons, Plaintiffs respectfully request that this Court issue: (i) a

temporary restraining order restraining and enjoining JJCI and J&J Global, pending a hearing on

Plaintiffs’ request for a preliminary injunction, from utilizing a divisive merger strategy or any

other form of corporate transaction to separate their assets from liability for the talc-related claims

that Plaintiffs are currently pursuing against it; (ii) a preliminary injunction restraining and

enjoining JJCI and J&J Global from utilizing a divisive merger strategy or any other form of

corporate transaction to separate their assets from liability for the talc-related claims that Plaintiffs

are currently pursuing against it pending the final adjudication of the Petition; and (iii) an order

requiring J&J Global and/or Other J&J Entities to return assets (including dividends) that JJCI

transferred to J&J Global and/or Other J&J Entities after the time at which JJCI became insolvent

or insufficiently capitalized in relation to its business or incurred debts beyond its ability to pay as

they come due as a result of the talc-related liabilities.

Date: August 24, 2021 /s/ W. Wylie Blair

James G. Onder, #38049 Andy Birchfield (pro hac vice forthcoming)

W. Wylie Blair, #58196 Leigh O’Dell (pro hac vice forthcoming)
ONDERLAW, LLC BEASLEY ALLEN LAW FIRM
110 E. Lockwood Ave 218 Commerce St.
St. Louis, MO 63119 Montgomery, AL 36104
onder@onderlaw.com Andy.Birchfield@BeasleyAllen.com

15
blair@onderlaw.com Leigh.ODell@BeasleyAllen.com
Telephone: (314) 963-9000 Telephone: (334) 269-2343

Michelle A. Parfitt (pro hac vice forthcoming)
ASHCRAFT & GEREL, LLP
1825 K Street NW, Suite 700
Washington, DC 20006
mparfitt@ashcraftlaw.com
Telephone: (202) 783-6400
Alexandra Walsh (pro hac vice forthcoming)
J.J. Snidow (pro hac vice forthcoming)
WALSH LAW
1050 Connecticut Ave, NW, Suite 500
Washington D.C. 20036
awalsh@alexwalshlaw.com
jjsnidow@alexwalshlaw.com
Telephone: (202) 780-3014

Attorneys for Plaintiffs

16