Imerys Talc America files for bankruptcy under weight of talc litigation

(Reuters) – Imerys Talc America, the U.S. unit of French group Imerys SA and a supplier to healthcare conglomerate Johnson & Johnson Inc, on Wednesday said it was filing for Chapter 11 bankruptcy protection due to rising costs in the litigation over cosmetic talc.

“After carefully evaluating all possible options, we determined that pursuing Chapter 11 protection is the best course of action to address our historic talc-related liabilities and position the filing companies for continued growth,” Imerys Talc America said in a statement.

Imerys’ U.S. unit faces thousands of consumer lawsuits alleging that its talc causes cancer. The company supplied cosmetic talc to J&J for Johnson’s Baby Powder and other talc-based products.

Both companies have repeatedly denied the allegations, saying numerous studies and tests by regulators worldwide have shown their talc to be safe.

J&J on Wednesday did not immediately respond to a request for comment.

Imerys said that while it continued to believe the lawsuits are without merit, the prospect of rising settlement and defense costs over the next few years prompted the decision to file for bankruptcy.

The Chapter 11 filing also involves two other American subsidiaries of Imerys, Imerys Talc Vermont and Imerys Talc Canada.

Imerys on Wednesday also referred to heightened media coverage of the U.S. talc litigation, as well as “growing reluctance” by insurers and third-party contractual indemnitors to provide coverage for defense and settlement costs.

Reuters on Dec. 14 published a report detailing that J&J knew that the talc in its raw and finished powders sometimes tested positive for small amounts of asbestos from the 1970s into the early 2000s – test results it did not disclose to regulators or consumers.

J&J has also said that its talc products do not contain asbestos.

Mark Lanier, a Texas-based lawyer representing many of the more than 11,700 talc plaintiffs, on Wednesday said Imerys Talc America’s bankruptcy would not change the litigation.

“We have always targeted our cases against J&J and Colgate Palmolive, the companies that put the asbestos laced talc into the products,” Lanier said.

Colgate-Palmolive is another defendant in the U.S. talc litigation. The New York-based company sold Cashmere Bouquet, a cosmetic talcum powder, from 1871 to 1995.

Colgate did not immediately respond to a request for comment. It has denied allegations that its talc products cause cancer.

Additional reporting by Tamara Mathias in Bengaluru; Editing by Anil D’Silva and Bill Berkrot

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