A bottle of Johnson and Johnson Baby Powder is seen in a photo illustration taken in New York, February 24, 2016. REUTERS/Mike Segar

Ex-talc suppliers, insurers seek mediation as bankruptcies hit turning point

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(Reuters) – Requires mediation in two intertwined talc-related bankruptcies are rising as disputes over insurance coverage insurance policies have slowed down efforts to resolve litigation alleging publicity to talc merchandise prompted most cancers by the Chapter 11 course of.

Former Johnson & Johnson talc provider Imerys, former talc miner Cyprus Mines Corp, two units of insurers and a lawyer representing future claimants in each instances say mediation is essential to find out how greatest to maneuver ahead within the two instances.

Imerys and Cyprus filed for chapter individually, however are linked as a results of Imerys’s buy of sure talc-related property from Cyprus in 1992.

The requests for mediation, filed on Tuesday and Wednesday in Delaware chapter courtroom, got here a few weeks after U.S. Chapter Decide Laurie Selber Silverstein axed sure votes in favor of Imerys’s proposed reorganization plan, leaving it simply shy of the votes it wanted to maneuver forward with the proposal.

Complicating Imerys’s state of affairs is its connection to the Cyprus chapter, which can also be the results of talc-related litigation. Cyprus, represented by Reed Smith, filed for chapter in February. Earlier than it filed for Chapter 11 safety, Cyprus struck a cope with Imerys to contribute $130 million to a belief to compensate victims who’re suing Imerys, which picked up talc-related liabilities along with property by the 1992 transaction.

The deal additionally calls on Cyprus to contribute to the belief rights below historic insurance coverage insurance policies it obtained within the a long time previous the 1992 sale. One of many insurers, Century Indemnity Firm, says in courtroom papers that its request for a launch of future claims that Cyprus might assert below these insurance policies has prompted delays.

Each instances are actually at a “critical juncture” and must “break the proverbial logjam,” Cyprus mentioned in its movement for mediation.

Imerys, represented by Latham & Watkins, filed for chapter in 2019 to resolve widespread litigation alleging its talc prompted mesothelioma and ovarian most cancers. J&J – which lately positioned its personal talc liabilities into a brand new entity that then filed for chapter however has maintained that its shopper talc merchandise are protected – has opposed Imerys’s reorganization plan, saying it’s designed to encourage most cancers victims to sue J&J as an alternative of Imerys.

The important thing part of the plan that did not safe the votes mandatory to maneuver ahead would have basically required private damage claims within the chapter to be dealt with solely by a belief and blocked claimants from suing insurance coverage carriers and different associated events sooner or later.

Along with Century, different historic Cyprus insurers, together with Columbia Casualty Firm and Berkshire Hathaway Specialty Insurance coverage firm, have additionally sought mediation.

Whereas the events seem to agree that mediation is required, they don’t agree on who ought to be chosen as the mediator, with every constituency proposing a special candidate.

A listening to on the motions is scheduled to happen earlier than Silverstein on Nov. 15.

Imerys, as soon as the U.S.-based arm of French group Imerys SA, was bought for $223 million in 2020. These proceeds will go to the belief to pay private damage claims.

The instances are In re Imerys Talc America Inc., U.S. Chapter Court docket, District of Delaware, No. 19-10289 and In re Cyprus Mines Corp, U.S. Chapter Court docket, District of Delaware, No. 21-10398.

For Imerys: Jeffrey Bjork, Kimberly Posin, Helena Tseregounis and Richard Levy of Latham & Watkins; and Mark Collins, Michael Service provider, Amanda Steele and Brett Haywood of Richards, Layton & Finger

For Cyprus: Kurt Gwynne, Jason Angelo, Paul Singer and Luke Sizemore of Reed Smith

For Century: Mark Plevin and Tacie Yoon of Crowell & Moring and Marc Casarino of White and Williams

For the opposite Cyprus insurers: Tancred Schiavoni and Janine Panchok-Berry of O’Melveny & Myers; and Stamatios Stamoulis of Stamoulis & Weinblatt

Learn extra:

Ex-J&J talc provider contemplating new path as decide nixes chapter plan votes

Cyprus Mines insurers urge decide to usher in new voice for future talc claimants

Maria Chutchian

Maria Chutchian stories on company bankruptcies and restructurings. She might be reached at [email protected]