By Mike Spector and Dan Levine
(Reuters) -Johnson & Johnson on Thursday put into bankruptcy tens of thousands of legal claims alleging its Baby Powder and other talc-based products caused cancer, offloading the potential liabilities into a newly created subsidiary hived off from the rest of the healthcare conglomerate.
J&J put the talc claims into an entity called LTL Management LLC, which filed for bankruptcy protection on Thursday in North Carolina, according to the company and court records.
The company 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.
J&J said talc cases would be halted while LTL navigates bankruptcy proceedings.
It added it would fund LTL's liabilities in an amount later determined by a bankruptcy judge, and establish a $2 billion trust for the same purpose. LTL has also received certain royalty revenue streams with a present value of more than $350 million to contribute to potential legal costs, J&J said.
"We are taking these actions to bring certainty to all parties involved in the cosmetic talc cases," J&J General Counsel Michael Ullmann said in a statement.
"While we continue to stand firmly behind the safety of our cosmetic talc products, we believe resolving this matter as quickly and efficiently as possible is in the best interests of the (company) and all stakeholders," Ullmann added.
Reuters first reported in July that J&J was exploring offloading its talc liabilities and placing them into bankruptcy.
(Reporting by Mike Spector in New York and Dan Levine in San Francisco; Additional reporting by Amruta Khandekar; Editing by Peter Cooney)