Johnson & Johnson has offered to pay $8.9B to resolve tens of thousands of lawsuits.
Former customers allege that the healthcare giant's talc-based products
caused them cancer and may have been contaminated with asbestos.
- Johnson & Johnson proposed a settlement that would see it pay $8.9B over 25 years through a specialized subsidiary.
- The company previously attempted a legal maneuver called a "Texas two-step" to protect itself from liability.
- The
strategy involves creating a separate entity to take over the parent
company's liabilities, which are then reduced when the specialized
unit declares bankruptcy.
- A federal appeals court initially prevented Johnson & Johnson from using the maneuver on the grounds that the firm was not in "financial distress."
- Johnson & Johnson said
in a filing yesterday that its subsidiary, LTL, has re-filed for
bankruptcy to "efficiently resolve all current and future claims arising
from cosmetic talc litigation."
- Johnson & Johnson plans to
use LTL to distribute the $8.9B that it has committed to resolve the
lawsuits, according to the filing.
- Johnson & Johnson said
the proposal was not an admission of guilt and maintains that the
lawsuits "are specious and lack scientific merit."
- Johnson
and Johnson tried to discredit research into the possible asbestos
contamination of its talc-based baby powder despite its own executives
raising concerns about the possibility since 1971.
