(Businesshala) – Johnson & Johnson on Thursday filed thousands of legal claims accusing cancer of its baby powder and other talc-based products into bankruptcy, offloading potential liabilities into a newly created subsidiary, which will take over from Rest Health. The service broke away from the group.
J&J put the talc claims into an entity called LTL Management LLC, which filed for bankruptcy protection in North Carolina on Thursday, according to company and court records.
The company faces legal action from thousands of plaintiffs alleging that its baby powder and other talc products contain asbestos and cause cancer. The plaintiffs include women with ovarian cancer and other women battling mesothelioma.
J&J said the talaq cases would be put on hold while the LTL navigates the bankruptcy proceedings.
It said it would fund LTL’s liabilities in an amount later determined by the bankruptcy judge, and set up a $2 billion trust for the same purpose. J&J said that LTL has also received certain royalty revenue streams with a current value of more than $350 million to contribute to potential legal costs.
“We are taking these steps to bring certainty to all parties involved in cosmetic talc cases,” Michael Ullman, General Counsel for Jammu and Kashmir, said in a statement.
“While we continue to stand firm for the safety of our cosmetic talc products, we believe it is in the best interest of[the Company]and all stakeholders to resolve this matter as quickly and efficiently as possible,” Ullman said. .
Businesshala first reported in July that J&J was exploring the possibility of liquidating its talc liabilities and putting them into bankruptcy.