J&J Opposes Former Talc Supplier's Bankruptcy Plan to Resolve Cancer Claims
By Peg Brickley
Imerys SA is pressing ahead in an effort to get out from under
lawsuits over its U.S. mining operation, Imerys Talc America Inc.,
over the protests of health-care company Johnson & Johnson.
The Imerys talc-mining business, which supplied talc for
Johnson's Baby Powder, had been hit with lawsuits claiming the
product caused cancer. It was placed into chapter 11 protection in
2019 and sold in 2020 for $223 million, with the proceeds earmarked
for a trust to pay cancer claims. It is now trying to win court
permission to seek creditor approval of its bankruptcy repayment
Johnson & Johnson, which has denied liability and is
fighting the lawsuits, says Imerys Talc's bankruptcy is an improper
effort to immunize the mining company's French parent, and make it
easier for cancer victims to sue Johnson & Johnson.
"J&J believes in the safety of its products," said Ronit
Berkovich, a lawyer for Johnson & Johnson.
Imerys SA didn't respond to a request for comment.
Imerys Talc is putting sale proceeds, insurance policies and
funds from settlements into a trust that will pay claims for
Victims won't get much from Imerys, court papers say. Under the
Imerys Talc plan, some ovarian cancer victims can expect to collect
only about 5% of the value that has been assigned to their claim,
Johnson & Johnson says the bankruptcy plan allowed cancer
victims to set the amount of their damages without opposition,
setting a precedent for collecting the rest of the money from
Johnson & Johnson.
Advocates of Imerys Talc's chapter 11 plan "have essentially
stolen a blank check from the purse of J&J," thanks to the way
Imerys Talc set up its bankruptcy trust, Ms. Berkovich said at a
hearing Tuesday in the U.S. Bankruptcy Court in Wilmington,
Judge Laurie Selber Silverstein presided Tuesday over the first
day of an expected series of hearings on the chapter 11 plan. She
is being asked to approve voting materials that will go to
creditors. Hearings will continue Friday.
New Brunswick, N.J.-based Johnson & Johnson, known for its
health-care and medical-device operations, said last year it would
stop selling baby powder made with talc in the U.S. and Canada, but
it remains exposed to damage claims over its talc products.
Some of the money for the proposed Imerys Talc trust is coming
by way of settlements that were reached in bankruptcy with former
owners of the mine, including Cyprus Mines Corp. and Rio Tinto
Insurers and splinter groups of cancer victims also are
objecting to Imerys Talc's chapter 11 plan voting materials, saying
the papers have insufficient detail to allow those affected by it
to evaluate what it does to their rights.
Assuming Imerys Talc ultimately wins permission to poll
creditors on its bankruptcy plan, it would have to return to court
to get a judge's approval of the plan.
Write to Peg Brickley at firstname.lastname@example.org
(END) Dow Jones Newswires
January 12, 2021 20:20 ET (01:20 GMT)
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