Hughes Hubbard Smooths Way for Resolution of Imerys' Talc-Related Suits

May 15, 2020 – Hughes Hubbard advised Paris-based minerals company Imerys SA in the negotiation of an agreement to resolve three of its indirect subsidiaries' historic talc-related liabilities in the U.S.

The agreement -- reached between Imerys Talc America, Imerys Talc Canada, Imerys Talc Vermont and representatives of both current and potential talc-related personal injury claimants -- was filed on May 15 in the U.S. Bankruptcy Court for the District of Delaware, where the subsidiaries' Chapter 11 proceedings are pending. It was documented in a joint plan of reorganization.

"Today's announcement marks a significant step toward a permanent resolution of historic talc-related liabilities," Imerys CEO Alessandro Dazza said in a statement. He added that the reorganization plan, once approved, will enable the group to focus on its current operations and move forward free from these past liabilities.

Under the proposed plan, the North American talc subsidiaries will initiate a sale process for their assets in which Imerys will be allowed to participate. Completion of the sale is expected to occur during the fourth quarter of this year, around the time the plan's approval process -- which includes an affirmative vote by the requisite majority of talc-related claimants followed by confirmation from the applicable U.S. courts -- is expected to be ratified.

Imerys' contribution to the plan to resolve the issue includes a minimum cash payment of $75 million, and a further amount of up to $102.5 million subject to a reduction mechanism proportionate to the sale price for the assets of its North American talc subsidiaries.

The plan and associated approval process will not materially affect business operations, employees, or customers of Imerys or its talc subsidiaries, which intend to operate as usual during their ongoing Chapter 11 process.

In February 2019, Imerys' talc subsidiaries filed for Chapter 11 protection in Delaware, citing the several thousand talc-related personal injury claims they faced in U.S. courts. At the time, personal injury claims for either mesothelioma or ovarian cancer allegedly arising from plaintiffs' exposure to the talc Imerys supplied for Johnson & Johnson's baby powder involved approximately 14,650 individual claimants.

Over a two-month period, HHR reviewed materials and trial videos, and interviewed more than 50 people directly involved in the litigation to provide an objective view of the best path forward for the talc subsidiaries. The Chapter 11 filing represented the culmination of months of planning and negotiations with a proposed representative for future tort claimants.

Latham & Watkins LLP represents the talc subsidiaries. HHR's representation of Imerys SA, the parent company, continues the firm's long history of advising companies in connection with the intersection of asbestos personal injury claims and bankruptcy.

With a presence in over 50 countries and more than 16,300 employees, Imerys is a global leader in mining and processing industrial minerals, with approximately 4.4 billion euros in annual revenue.

The agreement drew headlines in The New York Times, The Wall Street Journal, Reuters, Law360 and other news outlets.

Chris Kiplok, Bill Beausoleil and Erin Diers led the HHR team, which involved lawyers across the firm's New York, Paris, Washington and Kansas City offices, including George Tsougarakis, Dustin Smith, Miles Orton, Sabrine Tribié and Nick Velonis. In addition to Beausoleil, the team that conducted the external audit included Ted Mayer, Robb Patryk, Jim Fitzpatrick, Charlie Cohen, Fara Tabatabai, Shep DiCesare and Tina Schaefer.