J&J talc bankruptcy plan comes under scrutiny of Justice Dept. arm

The US Trustee, an office within the Justice Department, said that Johnson & Johnson's (NYSE:JNJ) use of a unit to handle the talc lawsuits it is facing as part of a bankruptcy strategy is based on fake financial distress.

In a court filing Monday, the US Trustee joined with plaintiffs asking a New Jersey bankruptcy court judge to dismiss J&J's (JNJ) use of the unit, LTL Management, to file bankruptcy as a way to settle the cases to minimize the financial impact on the healthcare giant.

"In the weeks leading up to its second bankruptcy filing, LTL and its ultimate parent, Johnson & Johnson (JNJ) engaged in a series of transactions that LTL admits were designed for no purpose other than creating artificial 'financial distress'," the filing states.

Bloomberg reported that the filing also noted J&J is trying again to get "out of a jam as cheaply as possible."

Earlier this month, LTL offered $8.9B over 25 years to resolve all current and future talc claims.

More on J&J and the talc bankruptcy

Judge extends stay for Johnson & Johnson talc claims another 60 days

Johnson & Johnson talc claimants seek dismissal of latest bankruptcy bid