Johnson & Johnson proposes $6.475 billion settlement in talc lawsuits

Johnson & Johnson (JNJ.N) announced on Wednesday a significant move towards resolving ongoing litigation over its baby powder and other talc products, with a proposed settlement amounting to $6.475 billion.

This substantial figure is aimed at settling tens of thousands of lawsuits alleging that the company’s talc products contain asbestos and could cause ovarian cancer.

Johnson & Johnson plans settlement via subsidiary

The healthcare giant plans to manage this settlement through a third bankruptcy filing of a subsidiary, LTL Management, specifically created to handle J&J’s talc liabilities.

This approach comes after courts dismissed two previous attempts to resolve the lawsuits via bankruptcy proceedings of the subsidiary. The company hopes that the new settlement proposal will achieve the necessary consensus among the plaintiffs.

Voting period and settlement details

Johnson & Johnson has initiated a three-month voting period during which it aims to secure approval from those affected.

The settlement intends to address all current and future ovarian cancer claims, which represent 99% of the talc-related lawsuits.

This includes approximately 54,000 cases currently centralized in a federal court in New Jersey.

Building on previous agreements

The proposed settlement not only aims to resolve these lawsuits but also builds on previous settlements with about 95% of individuals who developed mesothelioma after alleged asbestos exposure from J&J products.

Additionally, it includes agreements reached with various U.S. states that had sued the company for failing to warn consumers about the potential risks of its talc products.

Seeking broad support to end litigation

Johnson & Johnson has expressed confidence in reaching the 75% support threshold required for the bankruptcy settlement to be approved, which would effectively end the litigation.

This settlement would prevent future lawsuits and bar individuals from opting out to pursue separate claims.

The company maintains that its products do not contain asbestos and do not cause cancer, a stance supported by a majority of the attorneys representing the plaintiffs.

This proposed settlement marks a pivotal step for Johnson & Johnson as it seeks to close a challenging chapter in its history and mitigate the extensive financial and reputational impact of these lawsuits.

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