J&J files for bankruptcy in third attempt to settle scores of ovarian cancer claims
25 Sep 2024 --- Johnson & Johnson (J&J) tries for a third time through its subsidiary Red River Talc to settle thousands of lawsuits related to its talc products and end current and future claims specifically related to ovarian cancer.
The healthcare giant is dealing with approximately 61,000 lawsuits and maintains that its products do not cause cancer or contain asbestos. Its latest settlement proposal entails Red River paying claimants an additional US$1.75 billion for a total of US$8 billion over 25 years.
J&J is using the so-called “Texas two-step” strategy against the lawsuits whereby its subsidiary Red River Talc files for bankruptcy protection in the US state of Texas and deals with the court proceedings while J&J is sheltered from bankruptcy.
Plaintiff plan approval
To boost its latest bankruptcy effort, J&J asked plaintiffs to vote ahead of time on its proposal and says it obtained over 75% of votes needed for confirmation under US bankruptcy law.
“The overwhelming support for the plan demonstrates the company’s extensive, good-faith efforts to resolve this litigation for the benefit of all stakeholders,” says Erik Haas, Worldwide VP of Litigation at J&J. “This plan is fair and equitable to all parties and, therefore, should be expeditiously confirmed by the bankruptcy court.”
J&J previously settled state consumer protection claims and talc-related claims in bankruptcy cases filed by its talc suppliers. The company still maintains that the claims pertaining to its talc are baseless, citing denials from specialists and authorities. However, two years ago, the company said it would halt sales of talc-based baby powder and transition to cornstarch-based baby powder to meet “evolving global trends.”
In June, we reported on the company’s willingness to pay US$700 million to settle an investigation brought on by multiple US states.
In related news, Avon Products filed for Chapter 11 bankruptcy protection at the US Bankruptcy Court of the District of Delaware to fight hundreds of lawsuits claiming its products contained cancer-causing asbestos.
