Johnson & Johnson Announces Plan by its Subsidiary, LLT Management LLC, to Resolve All Current and Future Ovarian Cancer Talc Claims Through a Consensual “Prepackaged” Reorganization
01 Mai 2024 - 12:30PM
Business Wire
The Plan would resolve 99.75% of all pending talc lawsuits
against Johnson & Johnson and its affiliates in the United
States
Johnson & Johnson (NYSE: JNJ) (the “Company”) today
announced a proposed Plan of Reorganization (the “Plan”) by its
subsidiary, LLT Management LLC ("LLT"), for the comprehensive and
final resolution of all current and future claims related to
ovarian cancer arising from cosmetic talc litigation against it and
its affiliates in the United States.
“The Plan is the culmination of our consensual resolution
strategy that we announced last October,” said Erik Haas, Worldwide
Vice President of Litigation, Johnson & Johnson. “Since then,
the Company has worked with counsel representing the overwhelming
majority of talc claimants to bring this litigation to a close,
which we expect to do through this plan.”
The Plan enables the Company to resolve its talc
litigation:
- The ovarian claims to be resolved by the Plan constitute 99.75%
of the pending talc lawsuits against the Company and its affiliates
in the United States.
- The remaining pending personal injury lawsuits relate to
mesothelioma and will be addressed outside of the Plan. The Company
already has resolved 95% of mesothelioma lawsuits filed to
date.
- The State consumer protection claims will also be addressed
outside the Plan; the Company already has agreements in principle
to do so.
- Finally, and for completeness, the Company has also reached an
agreement in principle to resolve all talc-related claims against
it in the bankruptcy cases filed by suppliers of its talc (Imerys
Talc America, Inc., Cyprus Mines Corporation, and their related
parties).
The Plan differs significantly from the prior reorganizations
filed by LLT:
- The Plan provides for a three-month solicitation period during
which ovarian claimants are informed of its terms and will have the
opportunity to vote for or against the Plan – an opportunity they
were denied in prior bankruptcy cases.
- If 75% of claimants vote in favor of the Plan, a Company
subsidiary may file a consensual “prepackaged” Chapter 11
bankruptcy to secure its confirmation.
“Unlike the prior cases, it is the vote of the claimants – and
not the conflicting financial incentives of the small minority of
plaintiff lawyers who stand to receive excessive legal fees outside
of a reorganization – that decides whether the Plan may proceed,”
continued Mr. Haas.
The Plan should be readily confirmed, as it is in the best
interests of the ovarian claimants:
- The Plan commits the Company to pay ovarian claimants a present
value of approximately $6.475 billion to be paid over 25 years,
which is a far better recovery than the claimants stand to recover
at trial.
- Most ovarian claimants have not recovered and will not recover
anything at trial. Indeed, the Company has prevailed in
approximately 95% of ovarian cases tried to date, including every
ovarian case tried over the last six years. In addition, based upon
the historical run rate, it would take decades to litigate the
remaining cases, and therefore, most claimants will never have
“their day in court.”
- Further, on March 27, 2024, the Judge presiding over the
multi-district litigation (MDL) – where 93% of the ovarian claims
are filed – agreed to reconsider the scientific validity of the
opinions offered by plaintiffs’ experts in a Daubert hearing,
pursuant to the rigorous review required by the new Federal Rules
of Evidence 702. If the opinions fail that review, which the
Company expects they will, the ovarian claims should be
dismissed.
- In light of those risks, counsel representing the overwhelming
majority of current ovarian claimants assisted in the development
and support the Plan.
The Plan reflects a substantial commitment to resolve the
talc claims:
- In its July 2023 decision dismissing LLT’s prior bankruptcy
case, the New Jersey Bankruptcy Court stated that the Company and
LLT had made “remarkable progress” towards “a fair, efficient and
expeditious settlement” for all claimants and “strongly encouraged”
the pursuit of a comprehensive resolution through another
bankruptcy.
- The Company and LLT followed that directive, and the Plan
proposed by LLT, along with the settlement of the mesothelioma,
State consumer protection claims, and disputes with Imerys and
Cyprus, is the culmination of those efforts.
- To account for these settlements and the comprehensive
resolution of the ovarian claims through the Plan, the Company
recorded an incremental charge of approximately $2.7 billion in the
first quarter of 2024, for a total reserve of approximately $11.0
billion (or $13.7 billion nominal payable over 25 years).
The Company will continue to pursue alternative resolution
pathways:
- While solicitation of the Plan is pending, the Company remains
firmly committed to pursuing in parallel its other three previously
announced pathways toward a final and comprehensive resolution of
the talc litigation.
- Those pathways include (i) appealing the dismissal of LLT’s
prior bankruptcy; (ii) aggressively litigating in the tort system
against those claimants who elect not to settle, including,
importantly, proceeding with the Daubert hearing in the MDL; and
(iii) pursuing affirmative claims against the “experts” for false
and defamatory narratives about the Company’s products, and the
plaintiff law firms who have engaged in unethical conduct related
to these claims.
The Company stands by the safety of its talc
products:
- The Company reiterates that none of the talc-related claims
against it have merit. The claims are premised on the allegations
that have been rejected by independent experts, as well as
governmental and regulatory bodies, for decades. Additional
information on the Company’s position and the science supporting
the safety of talc is available at www.FactsAboutTalc.com.
“The talc claims asserted against the Company exemplify the
egregious impact on U.S. businesses from meritless litigation and
extreme judgments obtained by the plaintiffs’ bar through forum
shopping, the distortion of scientific literature with junk
science, and the unregulated and surreptitious financing of product
litigation by financial institutions, including private equity and
sovereign wealth funds,” Mr. Haas concluded.
Additional information regarding the Plan can be found here.
Investor Conference Call
Johnson & Johnson will conduct a conference call with
investors to discuss the announcement today, May 1st, at 8:00 a.m.
ET. You can join via:
Participant Dial-In: 877-869-3847 (U.S.) / 201-689-8261
(International) or Webcast:
https://event.webcasts.com/viewer/event.jsp?ei=1669186&tp_key=e4e521f076
A replay will be available approximately two hours after the
live webcast by visiting www.investor.jnj.com.
About Johnson & Johnson
At Johnson & Johnson, we believe health is everything. Our
strength in healthcare innovation empowers us to build a world
where complex diseases are prevented, treated, and cured, where
treatments are smarter and less invasive, and solutions are
personal. Through our expertise in Innovative Medicine and MedTech,
we are uniquely positioned to innovate across the full spectrum of
healthcare solutions today to deliver the breakthroughs of
tomorrow, and profoundly impact health for humanity. Learn more at
https://www.jnj.com/.
Cautions Concerning Forward-Looking Statement
This press release contains “forward-looking statements” as
defined in the Private Securities Litigation Reform Act of 1995
regarding the proposed prepackaged Chapter 11 bankruptcy plan. The
reader is cautioned not to rely on these forward-looking
statements. The information contained in this press release is for
informational purposes only and should not be construed as a
commitment by the Company to engage in any specific strategy or
course of action. Due to the inherent uncertainty of litigation,
the Company cannot predict the timing, ultimate outcome or
financial impact of this matter, or any other ongoing or future
litigation. The forward-looking statements in this press release
are based on current expectations of future events. If underlying
assumptions prove inaccurate or known or unknown risks or
uncertainties materialize, actual results could vary materially
from the expectations and projections of LLT Management LLC and/or
Johnson & Johnson. A further list and descriptions of these
risks, uncertainties and other factors can be found in Johnson
& Johnson’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, including in the sections captioned
“Cautionary Note Regarding Forward-Looking Statements” and “Item
1A. Risk Factors,” and in Johnson & Johnson’s subsequent
Quarterly Reports on Form 10-Q and other filings with the
Securities and Exchange Commission. Copies of these filings are
available online at www.sec.gov, www.jnj.com or on request from
Johnson & Johnson. Any forward-looking statement made in this
release speaks only as of the date of this release. Neither LLT
Management LLC nor Johnson & Johnson undertakes to update any
forward-looking statement as a result of new information or future
events or developments. The Company expressly disclaims all
liability in respect to actions taken or not taken based on any or
all the contents of this press release.
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Media contact: media-relations@its.jnj.com Investor
contact: investor-relations@its.jnj.com
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