Johnson & Johnson declared that it would pay $8.9 billion over 25 years to settle all existing and future claims against the company's baby powder and other cosmetic talc products, which were alleged to have caused cancer.
The company's subsidiary, LTL Management, Inc., will re-file for voluntary Chapter 11 bankruptcy to resolve the accusations, but the move is not an admission of guilt. Johnson & Johnson and its other affiliates will continue to conduct their operations as usual without filing for bankruptcy protection.
In a statement, Erik Haas, the company's Vice President of Litigation, denied the allegations and stated that the claims lacked scientific validity. However, the company chose to settle to avoid the lengthy process of resolving these cases in the tort system, which could take decades and incur significant expenses without compensating most claimants.
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