J&J exploring putting talc liabilities into bankruptcy

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J&J exploring putting talc liabilities into bankruptcy

Published

3 years ago

July 19, 2021

Harry Miller

Johnson & Johnson is exploring a plan to offload liabilities from widespread Baby Powder litigation into a newly created business that would then seek bankruptcy protection, according to seven people familiar with the matter.

During settlement discussions, one of the healthcare conglomerate’s attorneys has told plaintiffs’ lawyers that J&J could pursue the bankruptcy plan, which could result in lower payouts for cases that do not settle beforehand, some of the people said. Plaintiffs’ lawyers would initially be unable to stop J&J from taking such a step, though could pursue legal avenues to challenge it later.

J&J has not yet decided whether to pursue the bankruptcy plan and could ultimately abandon the idea, some of the people said. Reuters could not determine whether J&J has retained restructuring lawyers to help the company explore the bankruptcy plan.

J&J faces legal actions from tens of thousands of plaintiffs alleging its Baby Powder and other talc products contained asbestos and caused cancer. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.

“Johnson & Johnson Consumer Inc. has not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate,” the J&J subsidiary housing the company’s talc products said in a statement provided to Reuters. J&J declined further comment.

Should J&J proceed, plaintiffs who have not settled could find themselves in protracted bankruptcy proceedings with a likely much smaller company. Future payouts to plaintiffs would be dependent on how J&J decides to fund the entity housing its talc liabilities.

J&J is now considering using Texas’s “divisive merger” law, which allows a company to split into at least two entities. For J&J, that could create a new entity housing talc liabilities that would then file for bankruptcy to halt litigation, some of the people said.

The maneuver is known among legal experts as a Texas two-step bankruptcy, a strategy other companies facing asbestos litigation have used in recent years.

J&J could also explore using another mechanism to effectuate the bankruptcy filing besides the Texas law, some of the people said.

A 2018 Reuters investigation https://www.reuters.com/investigates/special-report/johnsonandjohnson-cancer found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. The company stopped selling Baby Powder in the U.S. and Canada in May 2020, in part due to what it called “misinformation” and “unfounded allegations” about the talc-based product. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.

The blue-chip company, which boasts a roughly $443 billion market value, faces legal actions from more than 30,000 plaintiffs alleging its talc products were unsafe. In June, the U.S. Supreme Court declined to hear J&J’s appeal of a Missouri court ruling that resulted in $2 billion of damages awarded to women alleging the company’s talc caused their ovarian cancer.

Plaintiffs’ lawyers view the two-step bankruptcy strategy as one that skirts potentially expensive settlements or judgments. Companies view it as a way to corral numerous lawsuits in one court for efficient negotiations that bankruptcy law dictates for asbestos liabilities. The company outside bankruptcy can reach a funding agreement with the entity navigating a court restructuring to cover future settlement payments.

In 2017, Brawny paper towels manufacturer Georgia-Pacific used the Texas law to move asbestos liabilities to an entity that later filed for bankruptcy in North Carolina.

Bankruptcy cases filed to resolve litigation, including those related to asbestos, often take years, and almost never fully repay creditors. OxyContin maker Purdue Pharma LP, for instance, is near resolving thousands of opioid lawsuits after two years of bankruptcy negotiations with a plan valued at more than $10 billion to address trillions of dollars in claims.

Another company, DBMP LLC, filed for bankruptcy last year to resolve asbestos liabilities and said the case could take up to eight years, according to a company press release.

J&J also faces litigation alleging it contributed to the U.S. opioid epidemic and recently recalled certain spray sunscreen products after discovering some of them contained low levels of benzene, another carcinogen.

The company in June agreed to pay $263 million to resolve opioid claims in New York. It has denied wrongdoing related to its opioids.

(Additional reporting by Nate Raymond; editing by Vanessa O’Connell and Edward Tobin)

News

In the news today: Tourism operators face heavy debt loads – National Post

Published

2 hours ago

April 23, 2024

Harry Miller

The Canadian Press

Published Apr 23, 2024 • 3 minute read

Canadian tourism operators says the tourism sector hasn’t returned to what it was pre-COVID. Unofficially named “The First Sidewalk” a 700-foot walking trail system to promote eco-tourism is shown in Bella Bella, B.C., on Tuesday, Oct. 25, 2022. Photo by CHAD HIPOLITO /THE CANADIAN PRESS

Here is a roundup of stories from The Canadian Press designed to bring you up to speed on what you need to know today…

Tourism operators face heavy debt, even as business roars back

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Canadian tourism operators says the tourism sector hasn’t returned to what it was pre-COVID.

Many businesses report carrying a heavy debt load, with Vancouver-based ecotourism company Maple Leaf Adventures saying it’s carrying it’s heaviest debt load in 38 years.

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Co-owner Maureen Gordon says while she and her competitors are recovering, higher interest rates are putting a damper on the post-COVID rebound.

Tourism Industry Association of Canada C-E-O Beth Potter says while the sector brought in 109-billion dollars in revenue last year, the federal government must help out by bringing in a new low interest loan program.

Tourism Minister Soraya Martinez Ferrada has said tourism operators have been affected by the warmest winter on record, but will be helped by the federal carbon rebate.

Here’s what else we’re watching …

Trudeau to make announcement in Saskatoon today

Prime Minister Justin Trudeau will be in Saskatoon today, where he will make an announcement highlighting measures focused on youth, education, and health that were contained in last week’s budget.

Joining Trudeau at the announcement in Saskatchewan’s largest city are minister for northern affairs Dan Vandal and Women and Gender Equality and Youth Minister Marci Ien.

Trudeau has faced conflict with the Saskatchewan Party government, whose leader, Premier Scott Moe, has been a vocal and long-standing opponent of the federal carbon levy.

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Moe is one of several premiers who have asked Trudeau to host a meeting to discuss alternatives to the consumer carbon price.

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‘Perfect storm’: Quebec farmer protests continue

Quebec farmers are continuing a series of protests that have brought slow rolling tractors to communities across the province’s agricultural regions.

The president of Quebec’s farmers union Martin Caron says producers are struggling with higher interest rates, growing paperwork and fees on plastic products, like containers of seeds, fertilizer and pesticides.

His organization is asking the current Coalition Avenir Quebec government to ensure farmers can get loans with interest rates of three per cent.

A spokesperson for Quebec’s agriculture minister says farmers can get emergency financial aid through a new program and that the government is consulting with the farmers union about reducing paperwork.

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Study shows caribou growth at wolves’ expense

New research suggests western Canada’s caribou population is growing.

But the same study also shows the biggest reason for the rebound is the slaughter of hundreds of wolves, a policy which will likely need to continue.

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Thirty-four researchers compared notes on herds in Alberta and British Columbia based on a study in Ecological Applications and found between 1991 and 2023, the caribou population dropped by half.

However, over the last few years the numbers have begun to slowly rise, as it’s estimated there are now more than 1500 caribou than there were had not restoration effort been made.

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Second World War hangar in Edmonton burns in fire

An aircraft hangar built during the Second World War at Edmonton’s former municipal airport has been destroyed by fire.

A spokesman for the City of Edmonton says in an email firefighters were called to Hangar 11 just before 7 p.m. Monday.

The city’s email says 11 fire crews were dispatched to the scene to deal with the heavy smoke and flames and the wooden building later collapsed.

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How a Newfoundland town shaped creepy ‘King Tide’

A new movie shot in Newfoundland showcases a community heavily reliant on a magical child.

“The King Tide” is about an isolated villagers having their lives forever changed after a mysterious infant washes up on their shores, the sole survivor of a devastating boat wreck.

They name the baby Isla, raise and learn she has healing powers promising immunity from injury and illness.

As the years pass, they become reliant on Isla’s abilities, but when her powers start to fade, a panic sets in as the community begins to fracture.

The movie was shot by Newfoundlander Christian Sparkes in Keels, Newfoundland, a former bustling fishing community which he says he’s been looking to film in for years, but couldn’t until recently due to the cost.

This report by The Canadian Press was first published April 23, 2024.

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We're still stockpiling reusable bags. Big grocers have adopted solutions, but experts have concerns – CBC News

Published

6 hours ago

April 23, 2024

Harry Miller

Canada’s plastic bag ban has had an unintended consequence: a proliferation of reusable bags piling up in basements, closets and, eventually, landfills.

“They’re everywhere,” said environmental researcher Tony Walker. “We’re drowning in them, and we shouldn’t be.”

To combat the problem, several of Canada’s big grocers have introduced solutions. Last week, Walmart launched a free national recycling pilot program for the retailer’s reusable blue bags. Competitors Sobeys and chains owned by Loblaw Companies Ltd. use recyclable paper bags for grocery delivery.

But some environmental experts argue that paper bags are also problematic and that the best solutions are those that help customers actually reuse their reusable bags.

“We just can’t keep giving [them] out,” said Walker, a professor at Dalhousie University’s School for Resource and Environmental Studies in Halifax. “We’re only meant to have a few of them, and we’re meant to use them until they fall apart.”

In late 2022, the federal government rolled out a ban on the manufacture, import and sale of several single-use plastics, including checkout bags. The regulations are being contested in court, but in the meantime, they remain in effect.

A man and a woman stand in their living room piling up blue Walmart reusable bags. — The Selas take stock of the reusable bags they’ve amassed from Walmart grocery delivery. They’ve signed up for the retailer’s free national recycling pilot program. (Darek Zdzienicki/CBC)

The regulations have made single-use shopping bags scarce in Canada, but they’ve also led to the proliferation of reusable bags, especially for grocery delivery.

“It just creates more waste, which is what we’re trying to avoid in the first place,” Walmart customer Udi Sela said in a CBC News interview in late 2022.

At the time, Sela, who lives in Maple, Ont., estimated his family had acquired about 300 reusable Walmart bags via grocery delivery.

“We can’t return them, we can’t do much with them.”

Now, a little more than a year later, Walmart has launched a pilot project to address the problem.

It allows customers to pack up their unwanted reusable Walmart blue bags and ship them — at no charge — to a facility where they’ll get a second life.

How it works

According to Walmart, bags in good condition will be laundered and donated to charity, primarily Food Banks Canada. Damaged bags will get recycled into other materials. Reusable bags typically can’t go in blue bins because they’re costly and difficult to recycle.

Customers must sign up for Walmart’s program, and enrolment is limited.

Jennifer Barbazza, Walmart’s senior manager of sustainability, said the retailer will fine-tune the details as the program progresses.

“[We] know that some customers have more reusable bags than maybe they need,” she said. “One of the things that we’re really excited to learn about from the pilot is customer acceptance and customer feedback.”

WATCH | Is your home overrun with reusable bags? Join the club:

Is your home overrun with reusable bags? You’re not alone.

3 months ago

Duration 7:25

Reusable bags are living rent free in closets and car trunks across the country. Most major retailers made the switch away from single-use plastic bags about a year ago, but it’s taking time for some customers to catch on. They’re forgetting to bring their bags with them, and buying more every week.

Udi Sela has already signed up.

“I definitely think it’s a step in the right direction,” he said in an interview on Friday. “It’s something that needed to be done a while ago. God knows we’ve got a ton of bags kind of piled up.”

He said he’s concerned that some customers may find mailing the bags a hurdle. However, it’s not deterring Sela, who soon plans to ship hundreds.

Passing the buck?

Not everyone is keen on Walmart’s project. Emily Alfred, a waste campaigner with Toronto Environmental Alliance, said donating the bags to the food bank is just passing on the problem.

“We need to remove waste from the system entirely, and just sending these somewhere else for someone else to deal with is not really a solution,” she said.

Alfred said a better option is a program Walmart piloted in Guelph, Ont., in 2022. For a fee, customers could check out reusable bags from an in-store kiosk and later return them to be cleaned and reused.

“That’s a real circular reuse system,” she said.

Two Walmart employees stand next to a kiosk here customers could, for a fee, get a resuable bag. — Walmart launched a pilot program in Guelph, Ont., in 2022. For a fee, customers could check out reusable bags from an in-store kiosk and then return them to be cleaned and reused. (Walmart Canada)

Walmart’s Barbazza said the retailer is continuing to explore different reusable bag programs, including ones placed in stores.

She also said she’s confident Canada’s food banks will make good use of the bags.

“There’s definitely a need for sturdy items to distribute materials to the food bank clients.”

The paper problem

Among Canada’s major grocers, only Walmart offers a reusable bag program for all customers.

Loblaw recently switched from reusable to recyclable paper bags for grocery delivery. Sobeys did not respond to requests for comment, but according to its website, the grocer also uses paper bags and “reusable options” for home delivery.

Several environmental experts say paper bags aren’t a good solution, because their production leaves a sizable carbon footprint.

“Paper bags are a problem,” Alfred said. “It takes a lot of energy to recycle paper, takes a lot of trees and energy to make new paper.”

Loblaw said it continues to explore a variety of more sustainable solutions. “It’s a challenge we’re committed to addressing,” spokesperson Dave Bauer said in an email.

Emily Alfred holding two reusable bags. — Emily Alfred, a waste campaigner with Toronto Environmental Alliance, says sending reusable bags to charity is just passing on the problem to someone else and that paper bags aren’t a solution. (Sophia Harris/CBC)

Both Walker and Alfred applaud Metro for its grocery delivery program, because the grocer, which operates in Ontario and Quebec, reuses delivery materials.

Metro said customers can get their goods delivered in a cardboard box or reusable bags, which can be returned and used for another delivery. Or customers can opt for a plastic bin and remove their groceries from it upon arrival.

Metro does not offer similar programs for in-store shoppers.

Alfred said the federal government should introduce regulations that mandate retailers adopt effective reusable bag programs for all customers.

“It’s up to our governments and people to demand that these companies do better,” she said.

But Walker suggested that the regulations would be hard to enforce and that incentives could be a better tactic.

For example, if retailers increased the price of reusable bags, shoppers might be less likely to forget them when they head to the store, he said.

“When the cost is a disincentive to do an activity, people change their behaviour.”

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