Johnson & Johnson unveils latest plan to settle ovarian cancer talc claims
By Ciara Linnane
Company to pay $6.475 billion over 25 years if three-quarters of claimants agree to plan
Johnson & Johnson on Wednesday unveiled its latest plan to settle ovarian cancer talc claims that have dogged the company for years with another reorganization of its LTL Management LLC unit, which manages the legal wrangling.
The plan is expected to resolve 99.75% of all pending talc lawsuits against the company and its units in the U.S., it said in a statement.
J&J has faced thousands of lawsuits alleging that cosmetic talc in its products was connected to cancers, asbestos poisoning and other illnesses. The company has attempted to resolve the claims via a series of proceedings in bankruptcy court but has repeatedly failed to do so.
The plan "is the culmination of our consensual resolution strategy that we announced last October," said Erik Haas, the company's worldwide vice president of litigation "Since then, the company has worked with counsel representing the overwhelming majority of talc claimants to bring this litigation to a close, which we expect to do through this plan."
J&J has not altered its view that the claims have no merit and that its products are safe.
The new plan differs from previous reorganizations filed by LLT in that there will be a three-month solicitation period during which ovarian claimants will be informed of the terms and can vote for or against the plan. That opportunity was not offered in prior bankruptcy cases.
If three-quarters of claimants vote in favor, the company will seek approval from the bankruptcy court.
The plan will pay out abut $6.475 billion over 25 years, which the company said is a far better recovery than would be likely in a trial.
The remaining pending personal injury lawsuits relate to mesothelioma and will be addressed separately. J & J (JNJ) has resolved 95% of mesothelioma lawsuits filed to date.
The company will address state consumer protection claims separately and already has agreements in principle to do so, said the statement.
It has also reached an agreement in principle to resolve claims brought by suppliers of its talc, which include Imerys Talc America, Inc., Cyprus Mines Corporation and their related parties.
The company recorded a charge of about $2.7 billion in the first quarter to raise its reserve for the claims to about $11 billion, or $13.7 billion nominal payable over 25 years.
See now: Johnson & Johnson's stock falls as profit beats but sales fall slightly short of estimates
The stock rose 2% in premarket trade but is down 7.8% in the year to date, while the S&P 500 SPX has gained 5.6%.
-Ciara Linnane
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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05-01-24 0726ET
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