Johnson & Johnson stock rose more than 3% in the extended session Tuesday after the company said it has proposed to pay up to $8.9 billion over 25 years to settle claims connected with cosmetic-talc litigation.
Johnson & Johnson
JNJ,
said in a filing Tuesday that its subsidiary LTL Management LLC, which manages the legal wrangling, has re-filed for voluntary Chapter 11 bankruptcy protection in order to obtain approval of a reorganization plan that will “equitably and efficiently resolve all claims arising from cosmetic talc litigation” against the company.
The company said it agreed to contribute the $8.9 billion to resolve “all the current and future talc claims” connected with its famous Johnson’s Baby Powder and other products containing talc. That’s an increase of $6.9 billion over the $2 billion previously committed in connection with LTL’s initial bankruptcy filing in October 2021, the company said.
The subsidiary also has commitments from more than 60,000 claimants to support resolutions on these terms, Johnson & Johnson said, adding that neither LTL’s original filing nor Tuesday’s re-filing are an admission of wrongdoing, nor “an indication that the company has changed its longstanding position that its talcum powder products are safe” and believes the claims to be “specious and lack scientific merit.”
A federal appeals court in January rejected the consumer products and drug maker’s move to place its talc liabilities into bankruptcy, saying that the subsidiary was not in financial distress.
Johnson & Johnson has faced thousands of lawsuits alleging that cosmetic talc in its products was connected to cancers, asbestos poisoning and other illnesses.
Shares of Johnson & Johnson have lost 10% in the past 12 months, matching losses for the S&P 500 index
SPX,
in the same period.
This post was originally published on Market Watch
