Lawsuits take toll on Johnson & Johnson as talc supplier files for bankruptcy

By Becky Bargh | Published: 19-Feb-2019

Imerys Talc America, Imerys Talc Vermont and Imerys Talc Canada are said to have taken the decision to ‘safeguard’ their interests as mounting lawsuits loom

A key supplier of Johnson & Johnson’s baby powder has filed for Chapter 11 bankruptcy amid talc-related liabilities in the US.

Last year the personal care company was forced to pay out US$4.7bn in damages to 22 women who claimed its baby powder was responsible for their development of ovarian cancer; six of which have passed away from the disease.

Imerys Talc America, Imerys Talc Vermont and Imerys Talc Canada all voluntarily filed for the bankruptcy clause in an effort to safeguard its business interests, while they work to negotiate an agreement with creditors.

Chapter 11 is commonly referred to as a ‘reorganisation’ bankruptcy, which a debtor usually proposes to keep business afloat and pay creditors over time.

While Imerys stands by its insistance that these lawsuits have no merit, the prospect of defending nearly 15,000 cases, with millions of settlement and defence costs prompted the decision.

Giorgio La Motta, President across Imerys Talc America, Imerys Talc Vermont and Imerys Talc Canada said: “This is an important, meaningful, strategic step for our business.

“After carefully evaluating all possible options, we determine that pursuing Chapter 11 protection is the best course of action to address our historic talc-related liabilities and position the filing companies for continued growth.”

He continued: “The safety of talc has been confirmed by dozens of peer-reviewed studies, as well as regulatory and scientific bodies, and the litigation is entirely without merit.”

The decision will, however, allow the companies to operate as usual throughout the process, but suspends all outstanding talc-related litigation.

The companies are said to be working towards resolution at the beginning of 2020.

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