Recently, Johnson & Johnson’s subsidiary, Red River Talc LLC, has voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. The filing aims to resolve all current and future claims related to ovarian cancer from cosmetic talc litigation involving Johnson & Johnson and its affiliates. This move follows J&J’s spin-off of its consumer product business into Kenvue nearly three years ago.
The filing has garnered the support of around 83% of current claimants for the proposed bankruptcy plan. Erik Haas, Johnson & Johnson’s Vice President of Litigation, emphasized that the plan reflects the company’s good-faith efforts to provide a fair and equitable resolution for all stakeholders. The plan’s confirmation is now sought in bankruptcy court.
To address opposition from some claimants, Red River increased its contribution to the settlement by $1.75 billion, bringing the total settlement value to $8 billion. This includes an additional $1.1 billion for distribution to claimants and $650 million to cover legal fees and expenses for plaintiffs’ counsel involved in the multi-district litigation.
Overall, the settlement has a present value of $8 billion, payable over 25 years, which equates to approximately $10 billion in nominal value. Johnson & Johnson stated that the plan is in the best interests of the ovarian claimants, offering a better recovery than they would receive at trial, where most have not recovered anything.
The plan aims to resolve 99.75% of all pending talc lawsuits in the U.S. against J&J, with the remaining 0.25% involving mesothelioma cases being addressed separately. J&J has already settled 95% of mesothelioma claims and resolved other talc-related claims from suppliers. Despite the bankruptcy filing, J&J maintains that the talc-related claims against it lack merit, having been dismissed by independent experts and regulatory bodies over the years.
