Judge Approves Presperse $50M Talc-Asbestos Bankruptcy Deal
Legislation & Litigation
Written by Travis Rodgers | Edited by Walter Pacheco
Hundreds of asbestos exposure injury claims are set to be resolved after a federal judge approved a bankruptcy plan for cosmetics supplier Presperse and its parent company Sumitomo Corporation.
The company, which has battled asbestos-related lawsuits since 2015, faced a recent wave of litigation from people who claimed they were exposed to asbestos through its talc-based products and later developed asbestos-related illnesses, including mesothelioma. Presperse supplies raw materials to the cosmetics and personal-care industry.
The plan includes a $50 million trust to settle current lawsuits and future claims and was approved by U.S. District Judge Robert Kirsch and Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey. Presperse filed Chapter 11 bankruptcy in September 2024 after litigation costs threatened the company’s ability to continue operating.
Presperse is owned by Tokyo-based Sumitomo Corporation, which also owns U.S.-based Sumitomo Corporation of Americas.
$50 Million Trust Targets Mounting Talc-Asbestos Claims
According to court documents, Presperse sells more than 400 products to over 300 corporate customers. These ingredients are used in formulations for color cosmetics, extended product applications, delivery of active ingredients, novel texturizing agents, anti-aging actives, skin cleansing systems and organic-certified extracts.
Presperse was first named a defendant in a talc personal injury lawsuit in 2015. From 2015 to 2021, it was named in several additional lawsuits. However, in late 2021 and 2022, the number of lawsuits increased to more than 275 cases, according to court filings.
The company stopped selling talc products in the summer of 2023, citing “an abundance of caution” and “the overwhelming cost of defense.” Talc products accounted for only 4% of its annual revenue, according to court filings.
Presperse called the lawsuits “entirely without merit” and maintains all talc sold by the company was safe.
Financial Strain Led to Bankruptcy
Presperse’s financial position collapsed in the year before its bankruptcy filing, records show. For the fiscal year ending in March 2024, the company posted a net loss of $40.6 million, driven largely by asbestos-related litigation. Pre-tax losses reached $53.3 million, while operating losses totaled $6.3 million, according to court documents.
By the end of that fiscal year, Presperse’s net assets had fallen to negative $14 million, and total liabilities stood at $59.2 million. The parent company absorbed much of the impact, booking litigation costs around $35 million in its fourth quarter results and the value of Presperse shares fell to zero.
Executives warned in court filings that ongoing litigation expenses made the company unlikely to keep operating without a court-supervised restructuring. Sumitomo contributed $49 million to the trust and a $2 million loan to help with bankruptcy financing.
Asbestos-Related Illnesses Linked to Talc
Talc is widely used in cosmetic and personal care products and can sometimes be contaminated with asbestos. Both minerals occur naturally in close proximity in the earth. Asbestos is a known carcinogen, and inhaling or ingesting the fibers can cause serious and often fatal diseases.
The most common illness linked to asbestos exposure is mesothelioma, a rare cancer that develops in the lining of the lungs, abdomen or heart; lung cancer, and asbestosis, a chronic lung disease that causes scarring of lung tissue. Symptoms of these illnesses include shortness of breath, persistent cough and chest pain. It can take decades for these illnesses to develop after exposure.
In mesothelioma cases, brief or low-level asbestos exposure can be enough to trigger disease years later. Any amount of asbestos exposure is dangerous. In recent years, asbestos lawyers have reported an increase in asbestos-related talc lawsuits.
According to the latest KCIC report, “In 2024, 751 of the 3,931 lawsuits filed alleged exposure to asbestos through talc. This represents 19% of total 2024 filings and an increase of 18% compared to 2023. The majority of these (90%) were mesothelioma cases.”
The trust’s approval marks a step toward resolving years of litigation and offers a path to compensation for claimants.
