J&J Unit Files For Bankruptcy to Pursue $8.9B Talc Settlement

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Facts

  • Johnson & Johnson (J&J) has agreed to pay $8.9B, far larger than its original offer of $2B, to settle tens of thousands of lawsuits alleging that talc in its famous baby powder product caused cancer.1
  • J&J had its subsidiary, LTL Management, file for bankruptcy to cover the settlement for a second time Tuesday and has commitments from 60k claimants to support the move. Previously, an appeals court said in January that LTL couldn't file for bankruptcy because it wasn’t in financial distress.2
  • Under the new proposal, the settlement will be placed in a bankruptcy trust for plaintiffs diagnosed with cancer before April 1 to cover medical bills for the next 25 years.3
  • In its bankruptcy court filing, LTL said it would present a judge with a reorganization plan by May 14. This came after J&J's board approved the vastly larger settlement over the weekend.4
  • In order for the deal to move forward, the new LTL bankruptcy must be approved by a court and the company must secure enough support from the plaintiffs, who claim that the talc used in J&J's baby powder contains asbestos — a known carcinogenic.5
  • Meanwhile, J&J says this agreement isn't an admission of guilt and maintains that its baby powder doesn't cause cancer.1

Sources: 1Reuters, 2Marketwatch, 3Cyprus mail, 4Guardian and 5New York Times.

Narratives

  • Establishment-critical narrative, as provided by Suffolk. Big Pharma continues to get away with murder, while the FDA allows companies to conduct their own clinical trials free from proper oversight. When they inevitably create toxic products, the companies get slapped with an easy-to-pay fine, while no executives go to jail or even pay individual penalties. Unless there’s a crackdown, this cycle will continue.
  • Pro-establishment narrative, as provided by Content lab u.s.. J&J, which isn't at fault, continues to be committed to producing the safest and most effective products. It only agreed to the settlement to avoid wasting time and money in a drawn-out court battle that would’ve resulted in nothing for the plaintiffs. Now J&J can return to the business of protecting people's health.