Johnson & Johnson plans to allocate an additional $1.1 billion to settle tens of thousands of legal claims alleging that its baby powder and other talc products caused cancer, according to two individuals familiar with the matter.

This increase would raise the total settlement amount to more than $9 billion, to be paid over 25 years. The company announced that it had reached an agreement with a plaintiffs' attorney representing 12,000 clients to endorse the settlement offer, adding to the support already received from other claimants.

Johnson & Johnson is preparing to have a subsidiary file for bankruptcy to finalize the proposed settlement by the end of the month, while the parent company would continue operating without filing for Chapter 11 bankruptcy. The company maintains that its talc products are safe and do not cause cancer.

The timing of the bankruptcy filing could change based on the results of additional votes.

The company stated that Allen Smith, the plaintiffs' lawyer who is now supporting its plan, agreed to the settlement offer in exchange for "additional monetary and non-monetary benefits for all talc claimants" under a bankruptcy plan that it expects a judge to approve.

Johnson & Johnson declined to comment on the additional payment amount and did not provide details regarding the timetable for the subsidiary's bankruptcy filing.

Earlier this summer, Johnson & Johnson set a deadline of July 26 for talc claimants to vote on the proposed bankruptcy settlement. In August, the company extended this deadline at the request of plaintiffs' attorneys, including Smith. Smith stated in a Johnson & Johnson news release that the current settlement offer represents "the best and most realistic option available for claimants to recover for their claims in a timely manner."

With support from Smith's clients, Johnson & Johnson expects to obtain approval from more than 75% of claimants, which is the legally required threshold for a judge to approve the bankruptcy settlement. The company believes the additional votes will push it "well above" the required threshold.

Johnson & Johnson faces talc lawsuits from over 62,000 plaintiffs, with the total number of claimants, including those who have not filed lawsuits, potentially reaching 100,000, according to Erik Haas, Johnson & Johnson's global vice president of litigation.

Some attorneys representing cancer victims oppose Johnson & Johnson's proposed resolution and remain in a contentious legal battle with the company.

Andy Birchfield, a leading opponent, stated that his law firm represents a "substantial number" of clients jointly with Smith and that these clients have "overwhelmingly rejected" Johnson & Johnson's settlement offer. Birchfield indicated he would continue to oppose the company's bankruptcy plan alongside other attorneys.

Johnson & Johnson has previously valued its settlement offer at a net present value of approximately $6.48 billion, with actual cash payments totaling $8 billion over 25 years. The proposed increase would bring the total payout above $9 billion. After two previous attempts to resolve the talc litigation through federal courts were unsuccessful, Johnson & Johnson is attempting a "Texas two-step" bankruptcy strategy.

This strategy involves transferring its talc liabilities to a newly created subsidiary, which then declares Chapter 11 bankruptcy, aiming to consolidate all claims into one settlement without requiring Johnson & Johnson itself to file for bankruptcy.

The latest settlement offer primarily addresses claims related to ovarian and other gynecological cancers, which represent the majority of the claims against the company. However, it excludes other claims, such as those alleging that asbestos-contaminated talc caused mesothelioma. Johnson & Johnson maintains that its talc products do not contain asbestos.