In a major development, healthcare giant Johnson & Johnson has reached a tentative settlement to address an investigation by more than 40 states regarding allegations that the company misled consumers about the safety of its talc baby powder and other talc-based products, as reported by CNBC.
The settlement, totalling $700 million, was confirmed by Johnson & Johnson in a statement to CNBC. However, it is crucial to note that this settlement does not resolve the multitude of consumer lawsuits, some of which are slated for trial this year, claiming that these products caused cancer.
Johnson & Johnson, a company that has faced financial and public relations challenges for decades due to these cases, asserts that its talc-based products, including the now-discontinued talc baby powder, are safe for consumers. The settlement is part of a broader effort by the company to address the legal and financial implications of the ongoing talc litigation.
CFO Joseph Wolk mentioned in an interview with The Wall Street Journal that the company is committed to achieving a comprehensive and final resolution of the talc litigation.
Last October, Johnson & Johnson revealed in a securities filing that 42 states and Washington, D.C., had initiated a joint investigation into the marketing of its talc-based products. The $700 million settlement is a significant increase from the approximately $400 million that the company set aside last year to resolve US state consumer protection claims.
Notably, Johnson & Johnson has attempted twice to resolve the consumer talc cases by transferring liabilities into a subsidiary, LTL Management, and having that unit file for Chapter 11 bankruptcy protection. Both attempts were rejected by the courts, and as part of the latest failed bankruptcy attempt, J&J proposed to pay $8.9 billion to talc claimants.
The company is currently seeking Supreme Court intervention to overturn the lower court rulings denying bankruptcy protection to LTL Management. Additionally, Johnson & Johnson ceased global sales of its talc-based baby powder last year.
Source: Thanks WIONews.com