Johnson & Johnson Subsidiary Seeks Bankruptcy Protection to Handle Talc Product Claims

New York Times  October 14, 2021


The company said the Chapter 11 bankruptcy filing was intended to resolve current and future claims that its products cause cancer.



Oct. 14, 2021



Johnson & Johnson said that its filing was “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.”Frederic J. Brown/Agence France-Presse — Getty Images


Johnson & Johnson announced on Thursday that a subsidiary that it recently created to manage claims that assert that its talc-based products caused cancer had filed for bankruptcy protection.



The company said in a statement that it hoped its filing for Chapter 11 protection would help resolve current and future claims “in a manner that is equitable to all parties.”

J.&J. said that it would provide money for the subsidiary for whatever amounts the bankruptcy court decided were owed, and that it would create a $2 billion trust for that reason. Certain royalty revenue streams have been allocated for the subsidiary to pay for any future costs, it added.

Andy Birchfield, a lawyer for Beasley Allen Law Firm, which has worked on litigation against Johnson & Johnson, said in a statement that the company’s filing was an “attempt to hide behind bankruptcy.”



“This stinks,” he said. “J.&J. can run, but it can’t hide.”



Mr. Birchfield likened the filing to similar moves by the Boy Scouts of America <> and U.S.A. Gymnastics <>, which also filed for bankruptcy this year while facing legal claims.



“Here’s another example of the wealthy and powerful using bankruptcy as a hiding place to protect their profits and avoid responsibility,” he said. “The entire nation, Congress and more than 30,000 victims of J.&J.’s dangerous talc product say ‘no’ to this flagrant and fraudulent abuse of the bankruptcy system.”



Michael Ullmann, executive vice president and general counsel at Johnson & Johnson, said the company continued to “stand firmly behind the safety of our cosmetic talc products.”



“We are taking these actions to bring certainty to all parties involved in the cosmetic talc cases,” he said in a statement.



The move is the latest twist in the saga of the company’s talc-based products, including its iconic baby powder. Johnson & Johnson discontinued its North American sales of the product last year, as the company faces thousands of lawsuits filed by customers who say its products cause cancer.



The subsidiary, LTL Management, will now bear the brunt of the claims, the company said. Johnson & Johnson itself and its other affiliates did not file for bankruptcy protection and “will continue to operate their businesses as usual,” it said.



John Kim, the chief legal officer of LTL, said in a statement that with the financial backing from the parent company, the subsidiary was “confident all parties will be treated equitably during this process.”



Johnson & Johnson said that its filing was “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.”



While it has prevailed in some cases, the company has had major losses in court over other claims. In June <>, a Missouri appeals court ordered the company to pay $2.1 billion in damages to women who said the company’s talcum products, including its baby powder, caused their ovarian cancers.



In 2018 <>, Johnson & Johnson was ordered to pay $4.69 billion to 22 women and their families, who said that they developed ovarian cancer from asbestos in the company’s talcum-powder products.