After declaring bankruptcy in February 2019 due to the increasing number of cancer lawsuits filed against it, Imerys Talc America announced it will be selling off its North American operations in order to settle some 14,000 pending lawsuits, the Insurance Journal reports.

Imerys Talc America is the sole provider of talc for Johnson and Johnson (J&J) and is the world’s leading talc producer, supplying roughly 15 percent of all the world’s talc. The company operates mines in Europe, North America, Asia, and Australia.

Imerys Talc America History of Litigation

According to the Insurance Journal, Imerys Talc America has faced many cancer-related lawsuits in the past. The majority of these cases involved women who alleged they had developed ovarian cancer as a result of using Imerys talc-based products. Some alleged that the talc was contaminated with asbestos while others argued that the talc itself caused their cancer. J&J and Imerys both deny that talc causes cancer and claim their products were properly marketed with the correct warnings. However, these claims didn’t stop the litigation against the mining company.

In 2018, the company was forced to pay $36 million in damages to a New Jersey man who claimed he developed mesothelioma after using J&J’s talc-based products for more than 30 years. The total settlement  J&J was required to pay, including damages, amounted to $117 million.

Later the same year, the company agreed to settle claims with 22 women who claimed they had purchased asbestos-contaminated talc. Imerys agreed to pay $5.5 million while J&J paid $4.7 million. The case is currently being appealed in Missouri courts.

Chapter 11 and Talc Cancer Lawsuits

In order to combat the increasing financial strain of the pending litigation, Imerys Talc America filed for bankruptcy on Feb. 13, 2019, along with two of its subsidiaries, Imerys Talc Vermont and Imerys Canada Inc. At that time, the company was already facing more than 14,000 cancer lawsuits related to its product.

“After carefully evaluating all possible options, we determined pursuing Chapter 11 protection is the best course of action to address our historic talc-related liabilities and position the companies for continued growth,” Imerys Talc America President Giorgio La Motta said in a statement reported by Becker’s Hospital Review.

As a part of the filing, Imerys set up a trust to deal with any future claims brought against the company related to cancer. The fund is to be overseen by James Patton, an experienced bankruptcy lawyer. The company is prepared to contribute as much as $132 million to the fund’s initial operations. The amount that the company is able to put into the fund is in large part contingent upon how its North American operations fair at auction. J&J may also be required to contribute money for former talc-based product-users who developed cancer even though the company continues to deny any responsibility or wrongdoing.

Selling the North America Division of Imerys Talc America

According to the Insurance Journal, there is a possibility that Imerys Talc America’s parent company, Imerys SA, may buy back the company’s North American assets at auction. According to the Journal, those assets made roughly $174 million in combined revenues in 2018.

Imerys Talc America has also announced it will be relinquishing its claims on roughly $2 billion in insurance coverage of the talc cases, though it is still fighting for coverage from some insurers in court.

The company’s bankruptcy debt reorganization plan is expected to receive court approval before the end of the year. A hearing on the matter is currently scheduled for June 30.

The case is In Re Imerys Talc America Inc., case number 19-10289, filed in U.S. Bankruptcy Court, District of Delaware, Wilmington.