Imerys Talk America, talc supplier for Johnson & Johnson, has filed for bankruptcy protection in the wake of a multitude of lawsuits purporting that its products are linked with cancer.
The company has filed for Chapter 11 bankruptcy following nearly a decade of multibillion-lawsuits, stating it doesn’t have the financial backing to deal with the 15,000 lawsuits made against its talc mineral product.
Giorgio La Motta, Imerys Talc America’s President, said in a statement, “After carefully evaluating all possible options, we determined pursuing Chapter 11 protection is the best course of action to address our historic talc-related liabilities and position the companies for continued growth.”
According to Reuters, the company gave multiple reasons for the filing, stating while it does not agree with the lawsuits, the rising settlement threat and defence costs have instigated the bankruptcy protection claim. Likewise a recent multibillion lawsuit verdict ruling against Johnson & Johnson has led to the filing.
Under the Chapter 11 of the U.S. bankruptcy code, the company can set up a trust that would handle and defend it against any future claims. Often used as a way to protect against billion-dollar lawsuits, the filing will also allow cases to be tried under a single judge and pressure plaintiffs to reach a lower settlement.