Johnson & Johnson (NYSE:JNJ) has filed for voluntary Chapter 11 bankruptcy protection for a subsidiary set up to handle legal claims over allegations that the drugmaker’s Baby Powder and other cosmetic talc products contain asbestos and cause cancer.
J&J is facing litigation from tens of thousands of people, including women suffering from ovarian cancer and mesothelioma.
Reuters reported that J&J’s costs defending nearly 40,000 cases have approached US$1bn, while settlements and verdicts have cost it another US$3.5bn.
In a statement, J&J said the bankruptcy filing for the LTL Management LLC entity is intended to resolve all claims related to cosmetic talc.
“While we continue to stand firmly behind the safety of our cosmetic talc products, we believe resolving this matter as quickly and efficiently as possible is in the best interests of the company and all stakeholders.”
J&J said it will fund any amounts the bankruptcy court later determines are owed by LTL and will establish a US$2bn trust for this purpose. LTL has also been allocated royalty revenue streams with a present value of over US$350mln to contribute to potential costs.
The group stressed that it is not admitting liability. “…these actions are not a concession of liability but rather a means to achieve an equitable and efficient resolution of the claims raised in the cosmetic talc litigation”, it said.
It noted that it has won the majority of cosmetic talc-related jury trials that have been litigated to date and continues to believe that none of the talc-related claims against the company have merit.