Johnson & Johnson (NYSE:JNJ) (J&J) has offered nearly US$9bn to settle thousands of lawsuits alleging its baby powder and talc products cause cancer.
It had initially proposed a US$2bn pay-out, attempting to quash some 40,000 lawsuits, but raised the figure almost five-fold to US$8.9bn, suggesting that 60,000 claimants already supported the new offer.
J&J paused sales of its talc baby powder in 2020, as demand slumped on allegations it caused cancer and even contained asbestos, and began facing court cases a year later.
Its subsidiary LTL Management, set up in 2021 to take responsibility for the claims, filed for bankruptcy on Tuesday for a second time, despite a court ruling invalidating the same manoeuvre in January.
LTL is now set to present a reorganisation plan to the New Jersey court around 14 May 2023, in which it will lay out proposals to pay the settlement.
"Resolving this matter through the proposed reorganisation plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner, and enables the company to remain focused on our commitment to profoundly and positively impact health for humanity," J&J litigation vice president Erik Haas said.
Haas also downplayed the claims, arguing J&J believed they were “specious” and lacked “scientific merit”.
Houston-based law firm Arnold & Itkin, which represents thousands of plantiffs, responded: “This sham deal does not even pay for most victims’ medical bills.”