Cost of Exactech Recall Lawsuits Over Defective Knee and Hip Implants Leads to Chapter 11 Bankruptcy Filing

Exactech bankruptcy likely means a stay will be issued on more than 2,500 lawsuits over recalled knee and hip implants pending in U.S. courts.

The medical device manufacturer Exactech has filed for Chapter 11 bankruptcy, amid growing legal costs and liabilities stemming from a number of massive recalls over defective knee and hip implants issued over the past few years.

In late 2021 and early 2022, a series of Exactech recalls were announced after it was discovered that certain components had been stored in “out-of-specification” vacuum sealed bags, which allowed oxygen to reach the components before they were implanted in patients.

This caused the Exactech knee and hip implants to degrade prematurely, increasing the risk of early failure and the need for risky revision surgery. The recalls impacted Exactech Optetrak, Optetrak Logic and Truliant knee replacement systems, Exactech Vantage ankle systems, and Exactech Novation and Acumatch hip implants.

Since the recalls were issued, more than 2,500 Exactech lawsuits have been filed in both federal and state courts against the manufacturer, with about 1,800 claims pending in a centralized multidistrict litigation (MDL) before U.S. District Judge Nicolas G. Garaufis, in the Eastern District of New York.

To help gauge how juries may respond to certain evidence and testimony that will be repeated throughout the litigation, a number of bellwether cases were being prepared for early trial dates in state and federal court. An Exactech hip implant lawsuit was previously expected to go before a Florida state court jury in December 2024, and a series of federal bellwether trials were expected to begin in September 2025. However, those trial dates are now unlikely to go forward.

On October 29, the manufacturer issued a press release announcing an Exactech bankruptcy, which it hopes will help resolve its outstanding liabilities and allow it to restructure.

As part of that Chapter 11 Exactech bankruptcy (PDF), which was filed in the U.S. Bankruptcy Court for the District of Delaware on Tuesday, it is expected that a stay will be issued on all active litigation against the company.

Exactech indicates it is being purchased by a group of private equity and asset firms, estimating the company’s values and assets are about the same: between $100 and $500 million. The company claims the sale and restructuring will result in an infusion of capital that it can use to provide payouts for Exactech recall lawsuit plaintiffs.

“Our team has delivered strong performance and positive growth in 2024, and we are confident in the trajectory of our business,” Darin Johnson, Exactech’s president and CEO, said in the press release. “However, despite the strength of the underlying business, we face unsustainable liabilities associated with knee and hip litigation related to the packaging recalls we voluntarily initiated between 2021 and 2022.”

It is unclear at this time how much will be offered to plaintiffs through any Exactech recall settlements in the bankruptcy, as that will be dependent on proceeds from a court-supervised sale of assets to the investor groups.