Johnson & Johnson is preparing to unveil widespread support in coming days for a $6.48 billion offer to settle tens of thousands of legal actions alleging its Baby Powder and other talc products caused cancer, two people familiar with the matter said.
The healthcare giant plans as soon as Friday to disclose that 75% or more of claimants alleging J&J talc sickened them have voted in favor of a bankruptcy settlement that would halt current and future cases, the people said.
J&J is preparing to have a subsidiary seek bankruptcy protection as soon as next week to execute the settlement, the people said. Support from 75% of claimants is the legally required threshold for a judge to approve the kind of bankruptcy settlement J&J has proposed. The deadline for casting votes was July 26.
The company maintains its talc products are safe and do not cause cancer. J&J’s timetable for both disclosing claimants’ settlement support and initiating a bankruptcy filing, which have not been previously reported, remains in flux and could change, one of the people said.
After being rebuffed twice by federal courts, J&J is attempting again to end the talc litigation in a so-called “Texas two-step” bankruptcy.
The two-step maneuver involves offloading its talc liability onto a newly created subsidiary, which then declares Chapter 11. The goal is to use the proceeding to force all claimants into one settlement without requiring J&J to file bankruptcy itself.
