Johnson & Johnson On Wednesday, the company said it planned to pay $6.5 billion over 25 years to settle nearly all of the thousands of U.S. lawsuits alleging that its talc products caused ovarian cancer, pending approval from claimants.
For decades, the cases have caused financial and public relations trouble for Johnson & Johnson, which claims its now-discontinued talc baby powder and other talc products safe For consumers. Approximately 99% of talc-related lawsuits filed against Johnson & Johnson and its subsidiaries stem from ovarian cancer.
The company recorded a charge of about $2.7 billion in the first quarter, boosting its talc claims provisions to about $11 billion.
The deal, which is pending claimant approval, will allow J&J to resolve the litigation through subsidiary LTL Management’s third bankruptcy filing. The court rejected two previous efforts by Johnson & Johnson to resolve the lawsuit through bankruptcy of the subsidiary, which was formed to absorb the company’s talcum powder debt.
Johnson & Johnson will begin a three-month voting period for claimants in hopes of reaching the 75% approval threshold required for a bankruptcy settlement that would end the lawsuit entirely and prevent future litigation. J&J executives said on a conference call with investors Wednesday that claimants in LTL Management’s previous bankruptcy case did not have a chance to vote.
The executive added that Johnson & Johnson has received “strong support from the vast majority of claimants,” based on conversations with attorneys or representatives.
“We firmly believe that this plan is in the best interests of claimants and should be immediately and favorably confirmed by the bankruptcy court,” Erik Haas, Johnson & Johnson’s vice president of global litigation, said on the call.
He argued that a settlement would be much better for the claimant than what might have been awarded at trial.
“As this record shows, most bearing claimants have not yet recovered, nor do they expect they will recover anything at trial,” Haas said. “At the pace the use cases are going, it will take decades to try the remaining cases, This means most claimants will never see their day in court.”
Still, the lawsuits resulted in some large verdicts for plaintiffs.including a approximately US$2 billion The award was given to 22 women who blamed their ovarian cancer on asbestos in Johnson & Johnson’s talc products.
Shares of Johnson & Johnson (J&J) closed up more than 4% on Wednesday.
Johnson & Johnson said remaining pending litigation related to a rare cancer called mesothelioma will be resolved outside of the new settlement. The pharmaceutical giant said it has settled 95% of mesothelioma lawsuits to date.
Johnson & Johnson said Wednesday it had reached a “final and comprehensive” settlement solve a investigation A coalition of more than 40 states accuses the company of misleading patients Safety That Talcum powder baby powder and other talc products.
The company has also reached an agreement in principle to resolve claims brought by its talc suppliers, including Imerys Talc America, Cyprus Mines Corporation and their affiliates.
