Imerys Bankruptcy May Benefit Johnson & Johnson in Talc Lawsuits

Johnson & Johnson may benefit from talc supplier Imerys filing for Chapter 11 bankruptcy. Dow Corning followed a similar route when hit with breast-implant lawsuits. Johnson & Johnson may be able to consolidate the many lawsuits they’re facing into a single court resolution as a result.

Johnson & Johnson is arguing that the lawsuits they’re facing should be grouped into the Imerys bankruptcy since the two are linked in legal agreements and insurance coverage.

The strategy worked for Dow Corning, which had 100,000 breast implant lawsuits against them. The settlement plan allowed Dow Chemical, owner of Dow Corning, to consolidate the lawsuits into a $2.4 billion settlement plan.

Federal courts are granted jurisdiction in bankruptcy reorganization.

Johnson & Johnson has cited the Dow Corning case in their April 18 filing. The company has filed for removal notices in many states over talc lawsuits. The move requires that plaintiffs go into pretrial to determine if they want to return to the pending lawsuits.

Imerys reported nearly $175 million in revenue and filed for bankruptcy in February. Talc litigation costs have led to the bankruptcy. Johnson & Johnson owned Imerys, but sold the company in 1989. Imerys was the sole supplier of talc to Johnson & Johnson.

A previous filing shows that Johnson & Johnson and Imerys have combined insurance of $2.7 billion that can be used to pay claims against the companies. Talc lawsuits have cost Johnson & Johnson billions of dollars. One lawsuit involving 22 women resulted in a $4.7 billion lawsuit.

A California court ruled in favor of a plaintiff and awarded $29 million in a mesothelioma case.

Johnson & Johnson holds firm on their stance that their Baby Powder is safe and does not cause cancer. Consolidating all cases against the manufacturer would drastically lower the amount Johnson & Johnson would have to pay in pending lawsuits.

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