Johnson & Johnson on Thursday declared bankruptcy in thousands of legal claims accusing its baby powder and other talc-based products of cancer, turning potential liabilities into a newly created subsidiary, the healthcare group. was separated from the rest
J&J put the talc claims into an entity called LTL Management LLC, which filed for bankruptcy protection in North Carolina on Thursday, according to company and court records.
It is facing legal action from thousands of plaintiffs who allege that the company’s baby powder and other talc products contain asbestos and cancer. The plaintiffs include women with ovarian cancer and others battling mesothelioma.
J&J said the divorce cases would be put on hold while the LTL navigates the bankruptcy proceedings.
It said it would fund LTL’s liabilities in an amount later determined by the bankruptcy judge, and set up a $2 billion trust for the same purpose. J&J said that LTL has also received certain royalty revenue streams with a current value of more than $350 million to contribute to potential legal costs.
“We are taking these steps to bring certainty to all parties involved in cosmetic talc cases,” General Counsel for Jammu and Kashmir Michael Ullman said in a statement.
“While we remain determined to protect our cosmetic talc products, we believe it is in the best interest of[the Company]and all stakeholders to resolve this matter as quickly and efficiently as possible,” Ullman said. .
Reuters first reported in July that J&J was exploring the possibility of liquidating its talc liabilities and putting them into bankruptcy.
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