J&J’s Talcum Powder Settlement is Moving Closer to Reality
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The proposed Johnson & Johnson baby powder settlement is likely to provide more money to plaintiffs than initially expected, with the increased amount signaling that a finalized settlement may be on the horizon.
J&J – which has been tied up in litigation over its talcum powder’s links to cancer for years – plans to add another $1.1 billion to its previously proposed settlement plan.
J&J originally announced the proposal in May at a value of $6.48 billion to be paid out over 25 years. The new amount J&J has agreed to will result in a total eventual cash value of over $9 billion.
The settlement is meant to resolve most of the baby powder lawsuits against the company that are tied to ovarian cancer. As of this month, nearly 60,000 cases are pending in multidistrict litigation.
J&J’s proposal does not cover any mesothelioma cases, which claim that asbestos in the company’s talcum powder caused customers to develop the rare and serious cancer.
Plaintiffs’ Lawyer Agrees to Recommend Revamped J&J Baby Powder Settlement
With more money included in the settlement plan, J&J has also seen increased support among plaintiffs.
According to the Wall Street Journal, a plaintiffs’ attorney representing 12,000 cases endorses this latest settlement proposal. This has helped increase support for the plan that was initially met with significant pushback from some plaintiffs.
For the settlement to move forward, it needed to garner the support of at least 75% of plaintiffs.
Reportedly, a secret ballot held in July had already secured that milestone. The plaintiffs’ lawyer’s recommendation of the plan helps further cement this settlement.
Next Step in Talc Settlement is Bankruptcy Plan Approval
With a larger settlement number decided upon and the plaintiff threshold likely met, the next step in the baby powder settlement is for J&J to gain approval for their bankruptcy plan.
This may still be a notable obstacle. J&J has attempted to implement a Texas-two-step bankruptcy strategy to handle baby powder litigation. This is when a subsidiary takes on liability and declares bankruptcy in place of the main company.
J&J formed LTL Management in 2021 to assume talcum powder lawsuit liabilities. The subsidiary has attempted bankruptcy several times since, but without success. This included a 2023 attempt to pay an $8.9 billion settlement.
Last month, J&J made its third bankruptcy attempt to address this settlement, which was, at that time, $6.5 billion. However, the court denied this attempt as well.
The federal supreme court that ruled against the bankruptcy said LTL Management failed to show evidence that the financial burden of the baby powder lawsuits was significant enough to qualify for bankruptcy.
According to Reuters, J&J is once again preparing for its subsidiary to declare bankruptcy and hopes to finalize the settlement this month.
Editor Lindsay Donaldson contributed to this article.