J&J is filing for bankruptcy in order to pursue a $8.9 billion talc settlement.
Key Highlights :
1. Johnson & Johnson has agreed to pay $8.9 billion to settle tens of thousands of lawsuits alleging that talc in its iconic Baby Powder and other products caused cancer.
2. The amount dwarfs J&J’s original offer of $2 billion.
3. The agreement follows a January appeals court ruling invalidating J&J’s controversial “Texas two-step” bankruptcy maneuver, in which it sought to offload the talc liability onto a subsidiary that immediately filed for Chapter 11.
4. The J&J subsidiary, LTL Management, filed for bankruptcy protection late Tuesday for a second time with the intent to present a reorganization plan containing the proposed settlement to a judge as soon as May 14, the subsidiary said in a court filing.
5. J&J said in a statement that about 60,000 talc claimants had agreed to the proposal.
6. The J&J subsidiary filed for bankruptcy in New Jersey, the same jurisdiction where it faced the appeals court defeat.
7. J&J crafted new financing arrangements with its subsidiary to avoid running afoul of the appeals ruling, the subsidiary said in a court filing.
8. The ruling determined LTL Management had no legitimate claim to bankruptcy because it was not in financial distress.
9. The appeals court rejection effectively raised the price tag for J&J to rid itself of the sprawling talc litigation, after plaintiffs’ lawyers had resisted the company’s tactics and prevailed.
10. J&J’s board met over the weekend and approved paying the vastly larger settlement to current and future plaintiffs with various gynecological cancers and mesothelioma, according to Mikal Watts, one of the plaintiffs’ lawyers who negotiated the agreement.
Johnson & Johnson has agreed to pay $8 million to settle a lawsuit alleging that the company's talcum powder products cause cancer. The suit was filed in California in 2012 by a woman who claimed to have developed ovarian cancer after using the company's talcum powder products for years. The woman is one of several plaintiffs in a nationwide talcum powder lawsuit.
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