Johnson & Johnson Legal Representative Launches Subsidiary Bankruptcy Filing Following Talc Lawsuit

A legal representative for Johnson & Johnson said during discussions over the settlement of its talc-based baby powder that the company is considering bankrupting a subsidiary as part of a strategy to settle thousands of claims linking the occurs in ovarian cancer, according to people familiar with the matter.

The possibility of a Chapter 11 bankruptcy was raised by the representative of J&J during discussions over its baby powder containing talc, according to personal injury lawyers, who said they received the information during recent negotiations. weeks to resolve customer complaints. Reuters reported on Sunday that J&J explored a possible bankruptcy of a subsidiary.

As of April, there were approximately 28,900 pending lawsuits in U.S. courts against the company and its subsidiary Johnson & Johnson Consumer Inc., alleging ovarian cancer and other injuries to powders containing talc, which it stopped selling in the United States and Canada last year. J&J said in its last quarterly report in April that the number of talcum powder cases continued to rise.

A spokesperson for the company said on Sunday that “Johnson & Johnson Consumer Inc. has not decided on any particular action in this litigation, other than to continue to defend the safety of talc and to litigate these cases under the tort system, as evidenced by ongoing trials. “

Bankruptcy can be a powerful tool for businesses facing a large number of lawsuits relating to allegedly defective products or other mass tort claims. A Chapter 11 filing can pressure claimants to agree to inferior settlements, ending ongoing litigation and discovery proceedings, and creating a centralized forum to assess claims.

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