Imerys SA (OTCMKTS:IMYSF) is considering various options for its North America talc unit that recently filed for bankruptcy. The unit file for bankruptcy following a series of cancer lawsuits linked to the Johnson & Johnson (NYSE:JNJ) baby powder.
Imerys considering selling North America Talc Businesses
According to people familiar with the matter, the company is considering various strategic alternatives for the business, including selling it. The French company’s US unit Imerys Talc America is planning to work with PJT Partners advisers even though a court approval is required to get a formal mandate.
In February, three Imerys Talc America units filed for Chapter II protection from creditors. The units cited growing claims in US Courts instituted mostly by women claiming that Imery’s talc resulted in their ovarian cancer. There were almost 15,000 claims in which some of the claimants indicated that they had mesothelioma caused by asbestos found in talc.
According to court filings, the units reportedly generated combined revenue of around $174 million last year. The people privy with the matter of the strategic considerations Imerys is considering stated that discussions are at initial stages, and the company is yet to reach a verdict on the next course of action. However, neither Imerys nor PJT have commented on the issue.
Imerys set up a trust to handle settlements
If the company sells the unit proceeds from the sale could avail funds to settle the lawsuits. At the time the company filed units filed for bankruptcy, the then CFO Alex Picard indicated that the aim was to set up a trust. Consequently, the trust will handle the asbestos and cancer lawsuits filed against the company.
By setting up and funding the trust, the Paris-based company wanted to negotiate with the creditors, insurers, and those with medical claims. The company has now, according to court documents, sought to sell itself under approval from the courts in an auction.
Interestingly under Chapter II protection, it is possible to combine the cases under a single Judge. As a result, the company can pressure the claimants to accept lower settlements.