Longtime Johnson & Johnson Talc Supplier Shops Sale of U.S. Operations

Johnson & Johnson’s long time talc supplier is reportedly shopping the sale of its North American talc operations after filing for bankruptcy under the weight of thousands of asbestos cancer lawsuits in which the company was enjoined with the pharmaceutical and cosmetics giant. Those lawsuits, which thus far have produced billions in plaintiffs verdicts, claim that Johnson & Johnson and Imerys produced and marketed talc-based products like Baby Powder and Shower to Shower which contained deadly asbestos fibers and caused the victims’ debilitating and often fatal health conditions.

Among the assets up for supposed sale, Imerys is reported to consider selling strategic alternatives that could include the sale of business in North America as a whole. In February 2019, Imerys filed for Chapter 11 bankruptcy protection, citing that the company was facing more than 14,000 lawsuits in the United States at the time. Reports stress that deliberations are still at an early stage and that no final decisions have been reached as of yet.

The reports are significant in that the proceeds from the sale of Imerys’ North American talc operations could be used to fund settlements of talcum powder cancer lawsuits, through some form of a trust. To do so, Imerys would ultimately need to negotiate with creditors, which would include insurers and those parties involved in asbestos cancer lawsuits.

By filing for Chapter 11 bankruptcy, Imerys would potentially be allowed to gather all of the asbestos cancer lawsuits it faces under a single federal judge and ultimately apply leverage against thousands of plaintiffs to accept settlements lower than they might otherwise be able to obtain through negotiations out of court or potentially jury verdicts at trial. As a consequence of Imerys Talc filing for bankruptcy, Johnson & Johnson unsuccessfully attempted to halt all of the talcum powder asbestos cancer lawsuits in which it was enjoined with Imerys.

Imerys, based in France, has been Johnson & Johnson’s talc supplier for decades, providing the New Jersey-based cosmetics company talc from mines sourced from places like Italy. While talc itself does not contain asbestos, the two are both naturally occurring minerals which can be found in deposits side by side one another. If companies that source and manufacture with talc do not take reasonable precautions to prevent cross contamination, innocent consumers can be hurt by exposure to carcinogenic asbestos fibers.

Johnson & Johnson has been rocked by recent allegations that it knew for decades about the presence of asbestos in its Baby Powder and possible links between using talc and women developing ovarian cancer and mesothelioma. To date, juries across the country have handed down over $5 billion in total compensation to dozens of plaintiffs in jury trials in California, Missouri, and New Jersey.

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