Johnson & Johnson placed into bankruptcy its liabilities for tens of thousands of lawsuits linking talc-based products to cancer, betting the move will help drive a settlement of personal-injury claims that are expected to grow for decades to come, WSJ Pro Bankruptcy reported. J&J said yesterday that a corporate affiliate holding talc-related liabilities had filed for chapter 11 protection in the U.S. Bankruptcy Court in Charlotte, N.C., shifting the landscape of a yearslong legal fight over whether Johnson’s Baby Powder caused ovarian cancer, asbestos poisoning and other illnesses. The company has maintained that the powder, which it stopped selling last year, is safe and doesn’t contain asbestos. While J&J itself didn’t file for bankruptcy, it is the latest business to use chapter 11 as a mechanism to settle large numbers of lawsuits over defective products or other alleged harms and underscores the financial risks to the company from the litigation, which as of July totaled roughly 34,600 lawsuits. J&J’s defense costs have totaled nearly $1 billion in the last five years, and settlements and verdicts were another $3.5 billion, court papers show. The bankruptcy filing means J&J will now get a breathing spell from further trials, plus the chance to put both current and future talc claims behind it for good through a bankruptcy settlement. Yesterday’s filing also confirms the fears of personal-injury lawyers, who had voiced worries that J&J would put talc claims into chapter 11 to stop jury verdicts, protect assets and pressure plaintiffs to accept settlements.
