L’Oréal Explores Unloading Chemical-Related Liabilities
The French company has engaged restructuring advisers to explore options for rising US legal liabilities linked to its use of talc and other chemical ingredients in some of its cosmetic products, the Wall Street Journal reported on Monday.
L Oreal has enlisted restructuring advisers to examine potential courses of action for mounting legal liabilities in the United States, as reported by the Wall Street Journal on Monday. The cosmetics giant's US division is collaborating with restructuring counsel Weil Gotshal & Manges and investment bank Ducera Partners to tackle lawsuits claiming certain talc products caused health issues, according to sources familiar with the situation.
As of June 30, there were approximately 760 US cases pending, compared to around 620 at the end of 2025. L Oreal has vigorously contested these allegations in its most recent half-year report.
The Journal suggests L Oreal is contemplating transferring tort liabilities into a separate corporate entity and potentially selling them through an outside investor, thereby isolating the company from its core operations. Alternatively, advisers are exploring a sale akin to Honeywell's recent divestiture of asbestos liabilities to Delticus. L Oreal, Weil Gotshal & Manges, and Ducera have not yet provided comment to Reuters regarding these inquiries.
The issue of talc litigation has resulted in substantial financial losses for Johnson & Johnson, with the company settling tens of thousands of lawsuits over baby powder and talc-related ovarian cancer claims. In July, J&J announced it would pay an estimated US$5.5 billion to resolve these lawsuits. Following this, the company filed for bankruptcy through a subsidiary shell company to attempt settlements, though those efforts also failed.
Avon Products, a US-based beauty brand, initiated Chapter 11 proceedings in 2024 to address its debt and talc-related liabilities. L Oreal is currently facing numerous lawsuits claiming its hair relaxer products could cause cancer in women, with Arizona suing the company in September, alleging it concealed evidence of potential cancer risks.
L Oreal USA has previously stated the company is confident in the safety of its products and deems these claims baseless both legally and scientifically.
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