Containers of Johnson’s baby powder, manufactured by Johnson and Johnson, are displayed on a shelf July 13, 2018 in San Francisco, California.
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Johnson&Johnson on Tuesday said it would pay $8.9 billion over the next 25 years to settle allegations that the company’s baby powder and other talc products caused cancer.
The company disclosed the proposed settlement in a securities filing. J&J’s subsidiary, LTL Management, also filed again for Chapter 11 bankruptcy protection after its first attempt was thwarted, the filing said.
More than 60,000 applicants have pledged to support the proposed order, which would require bankruptcy court approval, the filing added.
“Resolving this matter through the proposed reorganization plan is both fairer and more efficient, allows for timely compensation for beneficiaries and allows the company to remain focused on our commitment to make a profound and positive impact on the health of humanity,” said Erik Haas , J&J’s global vice president of litigation, in a statement.
But J&J still pushed back on the Talk allegations.
“The Company continues to believe these claims are flimsy and lack scientific merit,” Haas added.
The company ended sales of its talc-based baby powder worldwide this year after facing thousands of lawsuits from customers claiming that its talc products caused cancer due to contamination with the cancer-causing asbestos.
J&J spun off LTL management in October 2021 to reduce its litigation and settlement losses. The company escalated its Talk claims to the subsidiary and promptly filed for bankruptcy protection.
A judge confirmed J&J’s ability to employ the Chapter 11 strategy in February 2022.
But the US Circuit Court of Appeals for the 3rd Circuit reversed the ruling in January this year, saying neither LTL nor J&J had a legitimate need for bankruptcy protection because they were not in “financial distress.”
Leigh O’Dell, one of the lead attorneys representing the plaintiffs in the Talk lawsuits, told CNBC at the time that the ruling was another step toward ending J&J’s “attempted abuse of the bankruptcy system.”
O’Dell said in a statement to CNBC on Tuesday that J&J “is aiming for an extremely high discount on equity and isn’t really offering anything other than another bankruptcy and more delay, delay and delay.”
“This new motion should be viewed as a shameful attempt to shorten the time for people dying of cancer and to convince some advocates to give up,” she said.
Mikal Watts, one of the plaintiffs’ attorneys who negotiated the proposed settlement, said J&J was committed to “fairly compensate these deserving women” who have battled cancer as a result of the talc products. “Our job is to get our customers paid fairly for their injuries, and this settlement is the culmination of a job well done.”
J&J said last month it would take the case to the Supreme Court.
The company paid $7.4 billion in legal costs between 2020 and 2021, according to an annual filing. The company said Talk litigation has been a top source of legal costs over those years.