Oct 14 Reuters - Johnson Johnson put into bankruptcy tens of thousands legal claims alleging that its Baby Powder and other talc-based products caused cancer, offloading potential liabilities into a newly created subsidiary hived off from the rest of the healthcare conglomerate.
J&J filed the Talc claims in an entity called LTL Management LLC, which filed on Thursday for bankruptcy protection in North Carolina, according to the company and court records.
The company faces legal actions from thousands of plaintiffs alleging that its Baby Powder and other products contained asbestos and caused cancer. The plaintiffs include women who have ovarian cancer and others who are fighting mesothelioma.
J&J said that talc cases would be halted while LTL navigates bankruptcy proceeding proceedings.
It said it would fund LTL's liabilities in an amount determined later by a bankruptcy judge and establish a $2 billion trust for the same purpose. LTL has also received certain royalty revenue streams with a potential value of more than $350 million to contribute to the present costs, J&J said.
I take these actions to bring certainty to all parties involved in cosmetic Talc cases, J&J General Counsel Michael Ullmann said in a statement.
Reuters first reported in July that J&J was considering offloading its talc liabilities and placing them into bankruptcy.