On Tuesday, new Johnson & Johson talc news was released. Johnson & Johnson (NYSE:JNJ) has declared that its subsidiary company LTL Management LLC (LTL) has filed again for self-initiated bankruptcy protection under Chapter 11. The company’s decision to take action is motivated by its desire to receive approval for a reorganization strategy that will fairly and effectively settle all of its talc-related legal disputes in North America.
According to the press release, JNJ has pledged to provide monetary support for past and future allegations related to talcum powder for a total value of $8.9 billion over 25 years. This marks a significant increase from their previous pledge of $2 billion during LTL’s initial bankruptcy proceedings.
It was announced that a subsidiary of J&J would submit a new application for Chapter 11 bankruptcy protection and request permission from the court to proceed with a proposal that would lead to one of the most substantial payouts for product-liability claims in American history.
Johnson & Johnson (JNJ) Doesn’t Admit Any Wrongdoing
It is crucial to note that both LTL’s initial submission and this subsequent submission are not an acknowledgment of any wrongdoing or an indication that JNJ has altered its long-held belief that its talcum powder items are secure. Johnson & Johnson, as well as their other associated companies, did not request bankruptcy protection and will carry on with their regular business operations.
Based on the company’s statement, the revised sum has received support from over 60,000 individuals who have lodged lawsuits claiming that they suffered damage as a result of using J&J talcum powder.
In order for the agreement to be officially approved, there are a few requirements that need to be met. To begin with, LTL Management, a subsidiary of Johnson & Johnson, will need to submit a new bankruptcy filing and have it accepted by the court.
Furthermore, the proposed settlement must also be approved by the court. Finally, the company must gain enough backing from claimants in order for the settlement plan to move forward. Johnson & Johnson established LTL as a means to protect itself from the talc lawsuit in 2021. However, this effort was thwarted when plaintiffs objected to LTL’s previous bankruptcy filing.
The U.S. appeals court subsequently dismissed the filing this year, declaring that bankruptcy was not the appropriate method of resolving the issue.
If given the green light, the agreement would bring to a close a prolonged legal saga that has had a negative impact on Johnson & Johnson’s reputation. The brand’s infant powder, although not highly popular, is well-known and recognizable. Numerous complainants asserted that the talcum powder utilized in the commodity contained carcinogenic asbestos.
Johnson & Johnson’s leadership team was aware of the risk of asbestos exposure caused by their talcum-based products, such as the well-known Johnson’s Baby Powder, for a prolonged period. In recent years, the company had to deal with numerous lawsuits, as well as inquiries from government investigators and politicians, after previously resisting the recommendations made by researchers and scientists.