Johnson & Johnson talc powder spinoff files for bankruptcy

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A bankruptcy transfer from Johnson & Johnson might stall any talcum powder settlements for the hundreds of households which have sued the company for billions of {dollars} in damages in recent times.

Officials with Johnson & Johnson mentioned they’ve created a brand new subsidiary referred to as LTL Management. Johnson & Johnson mentioned it then moved $2 billion in child powder lawsuit settlement money to LTL, then submitted LTL for bankruptcy. LTL Management filed for bankruptcy safety in North Carolina on Thursday and listed its liabilities between $1 billion and $10 billion. 

Johnson & Johnson itself has not filed for bankruptcy and neither has any of its different subsidiaries like Aveeno and Neutrogena. 

The bankruptcy submitting comes as Johnson & Johnson has confronted public scrutiny over the long-term well being results of its child powder. Thousands of ladies have sued Johnson & Johnson claiming the talcum used within the child powder gave them ovarian most cancers. Talcum is a mineral comparable in structure to asbestos, which is thought to trigger most cancers, and they’re generally obtained from the identical mines. 

Johnson & Johnson beneath fireplace over child powder…

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A U.S. government-led analysis of 250,000 ladies, the most important such examine to have a look at the question, discovered no sturdy proof linking talc powder with ovarian most cancers. The lead writer of the evaluation referred to as the outcomes “very ambiguous” nonetheless.

Since the lawsuits have surfaced, Johnson & Johnson has stopped promoting its talc powder. The company has put aside virtually $4 billion for settling future lawsuits tied to the product.

In a press release Thursday, Johnson & Johnson mentioned “all cosmetic talc cases will be stayed pending the outcome of the proceedings,” that means no lawsuit settlements might be paid till bankruptcy court docket officers decide who will get how a lot and when. Earlier this year, a bunch of Black ladies sued Johnson & Johnson, alleging the company marketed to them for a long time regardless of realizing its child powder trigger most cancers.

Johnson & Johnson additionally mentioned this week that creating LTL Management and submitting for bankruptcy “are not a concession of liability” and as a substitute is one of the simplest ways to finish the talcum lawsuits.

“We are taking these actions to bring certainty to all parties involved in the cosmetic talc cases,” Johnson & Johnson legal professional Michael Ullmann mentioned in a statement. “While we continue to stand firmly behind the safety of our cosmetic talc products, we believe resolving this matter as quickly and efficiently as possible is in the best interests of the company and all stakeholders.”

Linda Lipsen, one of many legal professionals representing ladies with most cancers claims, referred to as Johnson & Johnson’s transfer “an unconscionable abuse of the legal system.”

“There are countless Americans suffering from cancer, or mourning the death of a loved one, because of the toxic baby powder that Johnson & Johnson put on the market that has made it one of the most profitable pharmaceutical corporations in the world,” Lipsen mentioned in a statement. “Their conduct and now bankruptcy gimmick is as despicable as it is brazen.”

Khristopher J. Brooks

Khristopher J. Brooks is a reporter and video editor for CBS MoneyWatch masking business, shopper and monetary tales that vary from financial inequality and housing points to bankruptcies and the business of sports activities. Brooks has coated business and financial improvement for the Rochester Democrat and Chronicle and the Bristol Herald Courier. He additionally coated greater training for the Omaha World-Herald, the Florida Times-Union and The Ledger in Lakeland, Florida.