Johnson & Johnson Increases Talc Settlement Offer to Over $9 Billion Amid Legal Battles

Johnson & Johnson has added $1.1 billion to its talc settlement, raising the total to over $9 billion. The healthcare giant aims to resolve thousands of lawsuits alleging its talc products caused cancer. The settlement is expected to be finalized by the end of the month.

Johnson & Johnson Adds $1.1 Billion to Talc Settlement, Raising Total to Over $9 Billion

According to two sources, Johnson & Johnson intends to allocate an additional $1.1 billion to resolve tens of thousands of legal actions that contend its baby powder and other talc products caused cancer.

The settlement's magnitude would be increased to over $9 billion, paid over 25 years. J&J announced on September 4 that it had agreed with a plaintiffs' counsel representing 12,000 clients to recommend the settlement offer to them. This agreement is in addition to the support that J&J has already received from other claimants.

One of the individuals stated that the healthcare giant is preparing to have a subsidiary declare bankruptcyto conclude the proposed settlement by the end of the month. J&J would continue to operate without the necessity of filing for Chapter 11. The company maintains that its talc products are harmless and do not cause cancer.

The timing of a bankruptcy filing may be affected by the outcome of the counting of additional ballots.

According to J&J, Allen Smith, the plaintiffs' counsel currently advocating for its plan, consented to the settlement offer in exchange for "additional monetary and non-monetary benefits for all talc claimants" in a bankruptcy plan that it anticipates a judge will later approve.

J&J declined to respond to an inquiry regarding the timetable for a subsidiary filing for bankruptcy protection and refused to comment on the amount of additional money it plans to pay, per Reuters.

Talc claimants were granted until July 26 to vote on the company's proposed bankruptcy settlement earlier this summer. According to J&J, plaintiffs' attorneys, including Smith, requested that claimants be granted additional time in August.

J&J's current settlement offer is "the best and most realistic option available for claimants to recover for their claims in a timely manner," Smith said in a September 4 news release.

J&J anticipates that over 75% of claimants who allege that the company's talc caused them to become ill will support the company through votes from Smith's clients. The legal prerequisite for a judge to sanction the bankruptcy settlement that J&J has proposed is that 75% of claimants provide support. J&J stated that the additional ballots will surpass that threshold.

J&J Faces 100,000 Talc Claims as Opponents Reject $9 Billion Settlement and Bankruptcy Strategy

According to a company filing, J&J faces talc lawsuits from over 62,000 plaintiffs. Erik Haas, J&J's global vice president of litigation, has stated that the figure increases to as much as 100,000 when counting claimants who have not filed a lawsuit.

The company is embroiled in a bitter battle with confident attorneys who represent people living with cancer, who are opposed to J&J's plan to resolve the litigation.

Andy Birchfield, one of the leading opponents, said his law firm shares representation of a "substantial number" of clients with Smith through a joint agreement. He told those clients that they had already "overwhelmingly rejected" J&J's settlement offer and that Birchfield would continue opposing the company's bankruptcy plan alongside other attorneys.

J&J has previously stated that its settlement offer has a net present value of approximately $6.48 billion, totaling $8 billion in actual cash payments over 25 years. The latter figure surpasses $9 billion due to the augmented compensation that J&J intends to implement.

J&J is again embarking on a "Texas two-step" bankruptcy to resolve the talc litigation following its rejection by federal courts on two separate occasions.

The two-step maneuver entails transferring J&J's talc liability to a newly established subsidiary, which declares Chapter 11. The objective is to utilize the proceeding to compel all claimants to enter into a single settlement without necessitating that J&J file for bankruptcy.

Allegations that talc caused ovarian and other gynecological malignancies are the primary claims against J&J, and the company's most recent settlement offer addresses these allegations.

Other claims, such as those from plaintiffs who claim that asbestos-laced talc caused their mesothelioma, a lethal cancer that targets a thin layer of tissue that covers many internal organs, are excluded. According to J&J, asbestos is not present in its soapstone.