As Bloomberg reports, sources say (pending certification) that Johnson & Johnson (J&J) has secured the 75% backing in votes it needed to move forward with a proposed $8 billion settlement ($6.75 billion present net value) to resolve lawsuits alleging its talc-based baby powder caused cancer. Conversely, J&J's third bankruptcy attempt through which it would settle the suits has failed, per Drugwatch. Meanwhile, the Wall Street Journal reports Avon Products has filed for bankruptcy to resolve similar lawsuits. Following are updates.
As Bloomberg reports, sources say (pending certification) that Johnson & Johnson (J&J) has secured the 75% backing in votes it needed to move forward with a proposed $8 billion settlement ($6.75 billion present net value) to resolve lawsuits alleging its talc-based baby powder caused cancer. Conversely, J&J's third bankruptcy attempt through which it would settle the suits has failed, per Drugwatch. Meanwhile, the Wall Street Journal reports Avon Products has filed for bankruptcy to resolve similar lawsuits. Following are updates.
See related story on J&J talc/cancer updates.
J&J Secures 75% Backing for $8 B Talc Resolution
July 26 was the deadline by which 75% of tens of thousands of plaintiffs were required to vote in favor of J&J's proposed $8 billion settlement (net $6.75 billion, present value) in order for it to move forward. These claims account for 99.75% of the talc-related lawsuits filed against J&J. As previously reported, the settlement would be made through LTL Management, J&J's subsidiary, through an anticipated bankruptcy filing.
Per Bloomberg, sources claim this 75% requirement was secured through secret balloting that ended late in July; J&J is expected to announce the official certification of these results in the coming days. As Bloomberg previously explained, this 75% threshold was required because J&J is seeking a "pre-packaged" bankruptcy "under rules allowing companies to speed through Chapter 11 cases if they have enough creditor support."
According to Drugwatch, J&J faces nearly 61,000 lawsuits claiming its talc products caused ovarian cancer and mesothelioma; 57,782 of these cases are pending in federal multidistrict litigation in New Jersey district court.
J&J's Third Bankruptcy Bid Strikes Out
Drugwatch also reports a federal supreme court has rejected J&J's third attempt at filing for bankruptcy, which was anticipated to settle the $8 billion in ovarian cancer lawsuits through J&J's subsidiary, LTL Management. The court claimed LTL Management "had only presented 'speculative' evidence that the financial burden of talc lawsuits created enough 'financial distress' to qualify for bankruptcy," the source stated, according to Reuters. J&J intends to appeal the dismissal with the U.S. Supreme Court.
On a related note, recent litigation brought against J&J in South Carolina found J&J's talc-containing products caused plaintiff Michael Perry's terminal cancer; the jury awarded him $63 million.
Avon Files for Bankruptcy Over Talc-related Cancer Claims
Finally, the Wall Street Journal highlighted Avon Products' chapter 11 bankruptcy filing over similar talc-related cancer lawsuits. In recent years, hundreds of talc suits have been filed against Avon, JD Supra explained, and "court filings state the company no longer has 'sufficient liquidity to litigate and/or settle' any other talc case." The Guardian noted Avon has already spent $225 million in costs defending itself against personal injury lawsuits and settlement payments.
Furthermore, Avon "expects the number of lawsuits to 'only increase absent a permanent solution.'" It therefore announced on Aug. 12, 2024, that it is seeking bankruptcy protection to address its debt and legacy talc liabilities.
Natura & Co. acquired Avon Products, Inc., in 2020 and recently announced plans to split off its Avon holdings into a separate business; these plans are now on hold.
