johnson & johnson The company announced on Wednesday that it would be making $6.5 billion over 25 years, pending approval from plaintiffs, to resolve nearly all of the thousands of lawsuits in the United States alleging that its talc-based products cause ovarian cancer. announced that it plans to pay US$.
These incidents have caused financial and public relations problems for J&J for decades, and J&J maintains that its now-discontinued talc baby powder and other talc products are safe for consumers. ing. Approximately 99% of talc-related lawsuits filed against J&J and its subsidiaries stem from ovarian cancer.
The company recorded a charge of approximately $2.7 billion in the first quarter to increase its reserve for talc claims to approximately $11 billion.
The deal, which is pending approval by plaintiffs, would allow J&J to resolve the case through subsidiary LTL Management’s third bankruptcy filing. The court rejected two previous efforts by J&J to resolve the case through the bankruptcy of a subsidiary created to absorb the talc debt.
J&J plans to begin a three-month voting period for the plaintiffs in hopes of reaching the 75% approval rating needed for a bankruptcy settlement that would permanently end the case and prevent future lawsuits. J&J executives said on a conference call with investors Wednesday that plaintiffs in LTL Management’s previous bankruptcy case did not have the opportunity to vote.
The executives added that J&J has received “tremendous support from the overwhelming majority of complainants” based on conversations with their attorneys and representatives.
“We strongly believe this plan is in the best interests of plaintiffs and should receive favorable and immediate approval from the bankruptcy court,” Eric Haas, J&J’s vice president of worldwide litigation, said on a conference call. Ta.
He argued that the proposed settlement represents a far better recovery for the plaintiffs than they could have obtained at trial.
“The track record shows that most of the cost claimants have not recovered and are not expected to recover anything in court,” Haas said. “At this rate of use cases being tried, it will take decades to try the remaining cases, meaning most claimants will never see their day in court.”
Still, lawsuits can result in large judgments for the plaintiff. That includes nearly $2 billion in awards supporting 22 women who blamed asbestos in J&J’s talc products for their ovarian cancer.
J&J stock closed up more than 4% on Wednesday.
J&J said its remaining pending lawsuits are related to a rare cancer called mesothelioma and will be addressed outside the scope of the new settlement plan. The pharmaceutical giant said 95% of mesothelioma lawsuits filed to date have already been resolved.
J&J reached a “final and comprehensive” settlement Wednesday to resolve an investigation by a coalition of more than 40 states that said the company misled patients about the safety of talc baby powder and other talc-based products. It was announced that.
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 related parties.
