Johnson & Johnson (NYSE:JNJ) said it’s reached agreements to settle a trio of derivatives lawsuits filed by shareholders seeking to reform the healthcare conglomerate after a spate of damaging recalls across its product portfolio.
New Brunswick, N.J.-based Johnson & Johnson revealed the agreements, which must still be approved by the U.S. District Court for New Jersey, in a recent regulatory filing.
The settlement agreement, which does not include any admission of guilt, would be in return for J&J agreeing to a series of corporate reforms and to pony up as much as $10.5 million in legal fees and expenses. Court approval could come as soon as next month, according to the filing.
Johnson & Johnson, current and former management "allegedly engaged in, approved of, or failed to remedy or prevent defective medical devices, improper pharmaceutical rebates, improper off-label marketing of pharmaceutical and medical device products, violations of current good manufacturing practice regulations that resulted in product recalls" and "failed to disclose the aforementioned alleged misconduct," according to court documents and the regulatory filing.
The agreements also cover a lawsuit filed over J&J’s $78 million settlement of a bribery scandal in April 2011. That deal put Foreign Corrupt Practices Act violations and kickback charges to rest, but triggered one of the lawsuits covered in the proposed settlements. The company admitted no responsibility for accusations in the U.S. and the U.K. that its DePuy Inc. unit earned more than $24 million in profits over eight years by bribing Greek orthopedic surgeons to buy its implants. The U.S. settlement also covers bribery charges over its pharmaceutical products and an alleged kickbacks scheme to win contracts under the United Nations Oil-for-Food program in Iraq.
The latest settlement agreements do not cover a lawsuit filed in the same Garden State court over former CEO William Weldon’s compensation. Weldon, who presided over the spate of recalls that have bedeviled the healthcare giant for the past few years and made Dealbook’s worst CEOs list, got a 30% pay bump for 2012 and was slated to walk away with a cool $143.5 million when he retired in April.
Johnson & Johnson said its board is evaluating the lawsuit’s allegations and that it aims to have dismissed derivatives suits filed in New Jersey Superior Court that make the same claims as the cases the proposed settlements would cover.