Johnson & Johnson (JNJ) Announces Red River Talc Files Voluntary Chapter 11

Johnson & Johnson (NYSE: JNJ) (the “Company”) announced that its subsidiary, Red River Talc LLC (“Red River”), filed a voluntary prepackaged Chapter 11 bankruptcy case today in the U.S. Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) to fully and finally resolve all current and future claims related to ovarian cancer arising from cosmetic talc litigation against the Company and its affiliates in the United States.

Red River filed the bankruptcy case after it received the support of the overwhelming majority (approximately 83%) of current claimants for the proposed bankruptcy plan (the “Plan”).

• The support far exceeds the 75% approval threshold required by the U.S. Bankruptcy Code to secure confirmation of the Plan.
• The Plan is also supported by the Future Claims Representative, an attorney representing the future claimants.

“The overwhelming support for the Plan demonstrates the Company’s extensive, good-faith efforts to resolve this litigation for the benefit of all stakeholders,” said Erik Haas, Worldwide Vice President of Litigation, Johnson & Johnson. “This Plan is fair and equitable to all parties and, therefore, should be expeditiously confirmed by the Bankruptcy Court.”

After extensive negotiations with counsel for claimants who initially opposed the Plan, Red River agreed to increase its contribution to the settlement by $1.75 billion to approximately $8 billion.

• Red River agreed to commit an additional $1.1 billion to the bankruptcy trust for distribution to claimants.
• The Company backed Red River’s commitments and also agreed to contribute an additional $650 million to resolve the claims for legal fees and expenses sought by plaintiffs’ counsel for their leadership roles in the multi-district litigation, where most of the filed ovarian claims are pending.
• In aggregate, the contemplated settlement represents a present value of approximately $8 billion to be paid over 25 years, totaling approximately $10 billion nominal.

The Plan is in the best interests of the ovarian claimants.

• The Plan constitutes one of the largest settlements ever reached in a mass tort bankruptcy case.
• The Plan affords claimants a far better recovery than they stand to recover at trial. Most ovarian claimants have not recovered and will not recover anything at trial. Indeed, the Company has prevailed in approximately 95% of ovarian cases tried to date, including every ovarian case tried over the last six years. In addition, based on the historical run rate, it would take decades to litigate the remaining cases, and therefore, most claimants will never have “their day in court.”
• Counsel representing the overwhelming majority of current ovarian claimants assisted in the development of and support the Plan.

The Plan enables a full and final resolution of the Company’s ovarian talc litigation.

• The Plan would resolve 99.75% of all pending talc lawsuits against Johnson & Johnson and its affiliates in the United States.
• The 0.25% remaining pending talc lawsuits relate to mesothelioma and are being addressed outside of the Plan; the Company has already resolved 95% of mesothelioma lawsuits filed to date.
• The Company previously reached settlement agreements to resolve the State consumer protection claims and all talc-related claims against it in the bankruptcy cases filed by suppliers of the Company’s talc (Imerys Talc America, Inc., Cyprus Mines Corporation, and their related parties).

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