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Johnson’s baby talcum powder on a supermarket shelf. Credit: Muhamad Norairin Ngateni/Shutterstock

A bankruptcy filing allows Johnson & Johnson to shift legal liability over its talc-based baby powder into a potential $2 billion compensation program for cancer victims, but not without a big fight from the plaintiffs bar.

A petition filed on Thursday in U.S. Bankruptcy Court in North Carolina’s Western District says Johnson & Johnson has spent $1 billion defending its baby powder in court, while juries across the country have returned unpredictable verdicts. As predicted, Johnson & Johnson used a “Texas Two-Step” merger to create a new subsidiary, LTL Management LLC, whose chief legal officer, John Kim, most recently was assistant general counsel of Johnson & Johnson.

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