J&J raises offer to settle talc lawsuit: report

Johnson and Johnson is looking to fast-track its efforts to settle the long-drawn-out talc lawsuit by paying an additional $1.1 billion, The Wall Street Journal reported.

This additional payout would raise the overall settlement amount to more than $9 billion, to be paid out over 25 years.

The company has reportedly secured the backing of Allen Smith, a prominent plaintiffs’ lawyer representing about 12,000 claimants, who previously opposed the deal.

The New Brunswick, New Jersey-based healthcare firm is raising the offer to compensate women who claimed that its talc baby powder caused them to develop gynecological cancer, the report said, citing unidentified people aware of the issue

Johnson and Johnson may get the backing of about 90% of votes if Smith’s clients accept the deal, the people said.

The company will need at least 75% claimant votes in favor for the plan to qualify for bankruptcy court approval.

The healthcare giant may have a subsidiary declare bankruptcy to finalize the proposed settlement before the end of this month, Reuters reported, citing one of the people aware of the development.

J&J will continue operations without filing for Chapter 11, asserting its talc products are safe and do not cause cancer.

The timing of any bankruptcy filing may shift based on additional vote counts.

Smith, the plaintiffs’ lawyer now backing J&J, endorsed the settlement, which includes benefits for all talc claimants, anticipating judicial approval.

Earlier, J&J had set a 26 July deadline for claimants to vote on the bankruptcy settlement, later extending it at the plaintiffs’ lawyers’ request.

Smith termed J&J’s current offer as “the best and most realistic option for claimants to recover claims swiftly,” in a statement released Wednesday.

After two federal court rejections, J&J is revisiting a “Texas two-step” bankruptcy to settle talc litigation.

The strategy involves transferring talc liabilities to a new subsidiary that then files for Chapter 11, aiming to consolidate all claims into one settlement without J&J declaring bankruptcy.

J&J has described its settlement offer as having a net present value of about $6.48 billion, with cash payments totaling $8 billion over 25 years, now increased to over $9 billion.

The latest offer targets claims linking talc to ovarian and other gynecological cancers, excluding mesothelioma allegations from presumed asbestos-contaminated talc, which J&J denies contains asbestos.