Johnson & Johnson announced on Tuesday that it will pay $8.9 billion over the next 25 years to settle charges that its baby powder and other talc products caused cancer.
The proposed settlement was reported in a securities filing by the corporation. According to the filing, J&J’s subsidiary LTL Management also re-filed for Chapter 11 bankruptcy protection after its previous effort was denied.
According to the document, more than 60,000 claimants have agreed to support the proposed resolution, which would require approval in bankruptcy court.
“Resolving this matter through the proposed reorganization plan is both more equitable and efficient, allows claimants to be compensated in a timely manner, and allows the Company to remain focused on our commitment to profoundly and positively impact health for humanity,” said Erik Haas, J&J’s worldwide vice president of litigation.
Nonetheless, J&J continued to deny the talc allegations.
“The Corporation continues to feel that these statements are speculative and devoid of scientific merit,” Haas stated.
This year, the business discontinued global sales of its talc-based baby powder after facing thousands of lawsuits from consumers who claimed its talc products caused cancer due to asbestos contamination.
J&J broke out LTL management in October 2021 in an effort to lower its lawsuit and settlement losses. The corporation transferred its talc cases to the subsidiary and promptly filed for bankruptcy.
J&J’s ability to adopt the Chapter 11 plan in February 2022 was confirmed by a judge.
Nevertheless, in January of this year, the United States Court of Appeals for the Third Circuit overturned the verdict, declaring that neither LTL nor J&J had a valid need for bankruptcy protection because they were not in “financial hardship.”
At the time, Leigh O’Dell, one of the lead attorneys representing victims in the talc claims, told CNBC that the verdict was another step toward putting an end to J&J’s “attempted misuse of the bankruptcy system.”
In a statement to CNBC on Tuesday, O’Dell stated that J&J is “seeking an incredibly steep discount on justice and is not actually proposing anything other than another bankruptcy and more delay, delay, delay.”
“This latest filing should be considered as a despicable attempt to drag out the clock on cancer patients and persuade some lawyers to give up,” she said.
Mikal Watts, one of the plaintiff attorneys who negotiated the proposed settlement, stated that J&J had committed to “properly compensating these deserving women” who have battled cancer as a result of the talc products. “Our objective is to make sure our clients are adequately compensated for their injuries, and this settlement is the result of a job well done.”
Last month, J&J announced that it would take the case to the Supreme Court.
According to an annual report, the company spent $7.4 billion on lawsuits between 2020 and 2021. According to the corporation, talc litigation was a major source of legal costs throughout those years.
