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Johnson & Johnson (J&J) said it agreed to pay $8.9 billion to resolve all cancer lawsuits tied to its talc-based powders and will make a fresh attempt to contain the liability within a bankruptcy filing by one of its units.
The world’s largest maker of healthcare products hopes to settle complaints from about 60,000 claimants and fund a trust set up in US bankruptcy court in Trenton, New Jersey, to cover future claims, the company said in a securities filing. J&J has already withdrawn its talc-based baby powder and others, including Shower to Shower, from the market.
J&J’s LTL Management unit filed a new Chapter 11 case to provide a basis for the trust, which outlines terms for settling the decade-long litigation.
An earlier filing, which didn’t include a settlement, was rejected in January after an appeals court found J&J erred in using bankruptcy to block juries from hearing lawsuits and handing out damage awards.
J&J wants a reorganisation plan for LTL that caps all the talc liability.
“Resolving this matter through the proposed reorganisation plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner,†Erik Haas, J&J’s world-wide head of litigation, said in a release. Monies in the settlement will be paid out over 25 years.
If enough victims agree to join the accord, J&J will be freed from defending against cancer claims tied to baby powder and others products tainted by asbestos.
J&J argues the talc cases pose a financial threat to the company despite its more than $478 billion market capitalisation.