Home » Business News • US business news » Johnson & Johnson To Pay $6.5 Billion To Settle Talc-Related Lawsuits
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Johnson & Johnson has announced a $6.5 billion settlement over 25 years to resolve nearly all the lawsuits alleging its talc-based products caused ovarian cancer.
The settlement is pending approval from the claimants involved.
J&J has faced many lawsuits and criticism surrounding its talc-based products going back decades.
The legal action particularly focuses on its particularly its discontinued talc baby powder.
The company has always maintained these products are safe for consumers.
Around 99 percent of lawsuits filed against J&J and its subsidiaries claim that the company's talc products led to ovarian cancer.
J&J recorded a $2.7 billion charge in the first quarter to cover these lawsuits, raising its reserve for talc-related claims to about $11 billion.
The current settlement is still pending approval.
It depends on a third bankruptcy filing of a J&J subsidiary, LTL Management, which was formed to manage the company's talc liabilities.
The courts had thwarted J&J's two previous attempts to resolve these lawsuits through LTL Management's bankruptcy.
The new plan entails a three-month voting period for claimants, with J&J hoping to achieve 75 percent support to finalize the bankruptcy settlement and preclude further litigation.
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Claimants did not have this voting opportunity in previous bankruptcy attempts, but J&J executives expressed confidence in achieving significant support based on conversations with legal representatives.
Erik Haas, J&J's worldwide vice president of litigation, said: “We firmly believe this plan is in the best interest of claimants and should receive a favorable and immediate confirmation from the bankruptcy court.”
“As that track record shows, most of bearing claimants have not recovered, nor are they expected to ever recover anything at trial.”
Despite litigation resulting in substantial verdicts, including a $2 billion award for 22 women, J&J's share price closed over four percent higher on the day of the settlement announcement.
J&J also indicated that the remaining lawsuits concerning a rare cancer, mesothelioma, would be resolved separately from this settlement.
The company has already settled 95 percent of mesothelioma cases.
J&J has reached comprehensive settlements with over 40 states investigating its handling of talc product safety and agreements with its talc suppliers, including Imerys Talc America and Cyprus Mines Corporation.
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