J&J Offers Its Former Talc Suppliers a $505M Settlement
Johnson & Johnson is proposing a settlement with mining companies Cyprus Mines Corporation and Imerys Talc America. If approved, J&J would initially pay $225 million and then an additional $280 million before the end of 2025.
Imerys Talc America, once a subsidiary of Cyprus Mines, was J&J’s sole talc supplier for its baby powder. Both companies have been named co-defendants with J&J in a number of talc lawsuits. As a result, Imerys filed for bankruptcy in 2019 and Cyprus Mines Corporation followed with its own bankruptcy filing in 2021.
In February 2024, Imerys and Cyprus Mines announced the creation of an $862 million trust fund to settle personal injury claims alleging asbestos-contaminated talc caused plaintiffs’ cancer. A portion of J&J’s proposed $505 million settlement with the companies would go toward their trust for talc claimants.
The legal disputes center on indemnification agreements Imerys and Cyprus contend should have made them exempt from cancer liability. However, J&J denied the indemnity agreements existed or disputed the terms.
Offer Comes Amid a Looming Deadline for Another Proposed J&J Settlement
In May 2024, Johnson & Johnson’s subsidiary LLT Management offered to pay $6.475 billion to settle all current and future ovarian cancer lawsuits nationwide. J&J faces thousands of lawsuits claiming its talc-based products cause ovarian cancer.
Court documents show J&J was aware of asbestos contamination in its talc-based products dating back to the 1950s. J&J ended worldwide use of talc in its products in 2023.
LTL Management’s proposed settlement would only cover ovarian cases and wouldn’t cover any remaining mesothelioma lawsuits. J&J says it has settled 95% of mesothelioma cases already.
At least 75% of the claimants need to agree to the deal to get approval. A final vote on the proposal is expected by July 26, 2024. If agreed upon, the money would be paid over the course of 25 years.
Past Bankruptcies, Talc’s Link to Asbestos
The multi-billion dollar settlement proposal is likely part of J&J’s plans for a third attempt at bankruptcy protection. A judge denied the company’s two failed bankruptcy attempts claiming the company wasn’t in financial distress making it unqualified for bankruptcy protection.
Both talc and asbestos are naturally occurring minerals that form close to each other in the earth. Talc is easily contaminated with asbestos during the mining process. Asbestos exposure is the primary cause of mesothelioma along with a number of other asbestos-related diseases.