By Dietrich Knauth
(Reuters) - Defunct talc supplier Whittaker, Clark & Daniels has filed for Chapter 11 bankruptcy, citing on Thursday a "deluge" of lawsuits alleging that its talc products caused asbestos exposure and cancer.
Whittaker operated one of the largest talc and industrial compound supply and distribution businesses in the U.S. in the 1970s and 1980s, but it ceased operations in 2004, according to court documents filed on Thursday in New Jersey bankruptcy court. Its corporate existence since then has largely been devoted to resolving a growing wave of legal claims related to its decades-long production of talc and industrial chemicals.
Whittaker has limited remaining assets, and the litigation is draining its funds faster than its investment income can keep up, according to the company.
More than 2,700 individuals have sued Whittaker alleging its talc products exposed them to asbestos. The firm had recently been spending $1 million a month on legal defense, it said in its Thursday court filing.
Whittaker said that it was forced to seek bankruptcy protection after a recent $29 million verdict in South Carolina led to appointing a receiver to take over its operations. The company argues that its assets should be equitably distributed among all talc claimants rather than being seized by the receiver.
Whittaker sold its equity to the Berkshire Hathaway-affiliated National Indemnity Company and Ringwalt & Liesche Co. in 2007. Berkshire Hathaway (NYSE:BRKa) said Thursday that its subsidiaries were not involved in Whittaker's past operations and did not issue any insurance to the company.
Litigation has driven other talc suppliers into bankruptcy in recent years, including Cyprus Mines and Imerys Talc. Johnson & Johnson (NYSE:JNJ) is currently attempting to resolve its talc liabilities through the bankruptcy of a subsidiary company, LTL Management.