J&J's Subsidiary Red River Talc Files For Chapter 11 Bankruptcy To Resolve Ovarian Cancer Claims

(RTTNews) - Johnson & Johnson (JNJ) announced that its subsidiary, Red River Talc LLC, has voluntarily filed for a prepackaged Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. This action aims to comprehensively resolve all current and future claims related to ovarian cancer from cosmetic talc litigation against the Company and its affiliates in the United States.

The company said Red River filed for bankruptcy after securing support from the vast majority of current claimants, approximately 83%, for the proposed bankruptcy plan.

Johnson & Johnson is dealing with lawsuits from more than 62,000 claimants who alleged that its baby powder and other talc products were contaminated with asbestos, resulting in ovarian cancer and other types of cancer.

But Johnson & Johnson denies the allegations and maintains that its products are safe.

After extensive negotiations with the counsel for claimants who initially opposed the plan, Red River agreed to raise its contribution to the settlement by $1.75 billion, bringing the total to approximately $8 billion.

The Company backed Red River's commitments and also agreed to contribute an additional $650 million to resolve the claims for legal fees and expenses sought by plaintiffs' counsel for their leadership roles in the multi-district litigation, where most of the filed ovarian claims are pending.

In aggregate, the contemplated settlement represents a present value of approximately $8 billion to be paid over 25 years, totaling approximately $10 billion nominal.