J&J may put subsidiary into bankruptcy to handle talc-related suits

July 20, 2021

How can J&J withstand the weight of its nearly 29,000 talc-related lawsuits? Maybe try sending a subsidiary to the bankruptcy court. 

According to a report in the Wall Street Journal, a legal representative involved in settlement discussions for the company said that J&J may place a subsidiary in bankruptcy as part of its strategy to finally put the mountain of lawsuits to rest.

The suits relate to claims that the company’s baby powder products, which contained talc, were linked to cases of ovarian cancer and other injuries. 

J&J has long maintained that there has been no established link between its baby powder products and cancer. But not all juries have agreed.

In one instance, 20 women were awarded $4 billion in Missouri for their claims that J&J’s baby powder gave them cancer (the judgment amount was later reduced to $2.1 billion). J&J appealed the judgment all the way up to the Supreme Court, who, last month, declined to hear the case. Other courts in related cases have sided with J&J.

If J&J places a subsidiary in bankruptcy, it could force the claimants to take a reduced settlement and protect the company from ongoing litigation.