L’Oréal Hires Advisers to Manage U.S. Product Liability Claims

L’Oréal has engaged restructuring advisers to manage growing legal liabilities in the United States related to talc and other chemical ingredients in its cosmetics. The company's U.S. subsidiary is working with law firm Weil Gotshal & Manges and investment bank Ducera Partners to address mass lawsuits alleging that its products caused illnesses, including claims that hair-relaxing products caused cancer.

To mitigate this exposure, the company is considering a strategy to move these tort liabilities into a separate corporate entity and sell that entity to an outside investor. This approach would allow the company to isolate its tort exposure from its core operating businesses and transfer responsibility for the claims to a new owner.

This strategy mirrors a previous transaction used by Honeywell and is intended to resolve the legal claims without the company having to enter Chapter 11 bankruptcy.