A U.S. bankruptcy Court Judge denied Johnson & Johnson’s third attempt to resolve the $10 billion talc litigation suit. J&J Vice President of Litigation Erik Haas said the company had secured support from 85% of plaintiffs, surpassing the 75% threshold needed for approval. The company has faced claims from more than 60,000 plaintiffs since the early 2010s, alleging that its baby powder and other talc products contained asbestos and caused ovarian cancer. Johnson & Johnson has repeatedly denied these allegations and maintains that its products are safe, despite finding asbestos in its talc in the 1970s without disclosing it to the FDA.
Chief Financial Officer Joe Wolk told investors that the court’s decision would not alter the company’s financial outlook and announced that J&J would reverse $7 billion previously held for the bankruptcy plan, noting it generated $20 billion in free cash flow last year. The company had already seen two earlier settlement rejections under its LTL Management subsidiary in New Jersey, where a judge ruled that bankruptcy was not the appropriate route. The proposed deal included an $8 billion present value, totaling $10 billion over 25 years to resolve 99.75% of current claims, with mesothelioma cases addressed separately. Analysts say the litigation is largely priced in but warn that ongoing uncertainty could continue to pressure the stock, as each $5 billion of additional liability may reduce the share price by about $2.
