Johnson & Johnson (JNJ) has announced that its subsidiary, Red River Talc LLC, has voluntarily filed for a prepackaged Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. This strategic move aims to address all current and future claims related to ovarian cancer stemming from cosmetic talc litigation against the company and its affiliates within the United States.
The filing follows significant progress, as Red River secured support from approximately 83% of current claimants for the proposed bankruptcy plan.
Johnson & Johnson is currently facing lawsuits from over 62,000 claimants who allege that its baby powder and other talc products were contaminated with asbestos, leading to ovarian cancer and other health issues. However, Johnson & Johnson staunchly denies these allegations and asserts that its products are safe.
Following extensive negotiations with counsel for claimants who initially opposed the bankruptcy plan, Red River has agreed to increase its contribution to the settlement by $1.75 billion, bringing the total settlement to around $8 billion.
Johnson & Johnson has supported Red River's commitments and also consented to contribute an additional $650 million to cover legal fees and expenses for plaintiffs' counsel, acknowledging their leadership roles in the multi-district litigation, where most of the ovarian claims are pending.
Overall, the settlement amounts to a present value of approximately $8 billion, to be disbursed over 25 years, totaling an estimated $10 billion in nominal terms.
