L’Oréal Explores Spinning Off Liability From 760 Talc Lawsuits

L’Oréal’s U.S. unit has retained restructuring firm Weil Gotshal & Manges and investment bank Ducera Partners to explore moving talc and hair-relaxer tort liabilities into a standalone entity for sale to an outside investor, the Wall Street Journal reported October 5.

Why it matters: Suppliers and insurers tied to L’Oréal or any manufacturer weighing a liability carve-out should confirm who absorbs the claims before extending new terms.

L’Oréal Hires Weil Gotshal and Ducera to Explore the Carve-Out

L’Oréal USA is weighing a structure that would isolate its tort claims in a standalone entity and sell that entity to a third party.

• Weil Gotshal & Manges is advising L’Oréal on the legal structure for separating the liabilities into a standalone entity.
• Ducera Partners is advising on a potential sale of that entity to an outside investor.
• L’Oréal, Weil Gotshal, and Ducera did not immediately respond to Reuters’ requests for comment on the exploration.

Talc and Hair-Relaxer Claims Are Both Climbing

L’Oréal’s exposure comes from two product lines, and both are getting worse.

• L’Oréal faced 760 pending U.S. lawsuits alleging its talc-based products contained asbestos as of June 30, 2026, up from 620 at the end of 2025.
• Thousands of additional lawsuits allege L’Oréal’s hair-relaxer products caused cancer.
• Arizona sued L’Oréal in September 2026, alleging the company concealed cancer-risk evidence tied to its hair-relaxer products.
• L’Oréal says it strongly contests the claims and remains confident in the safety of its products.

Honeywell, J&J, and Avon Already Ran This Playbook

Other manufacturers have used this same move to split legacy liabilities off from a healthy business.

• Honeywell divested its asbestos liabilities to corporate-liability platform Delticus in 2025 using a similar carve-out structure.
• Johnson & Johnson paid $5.5 billion in July 2026 to resolve talc-related claims through its own liability subsidiary.
• Avon Products filed Chapter 11 in 2024 specifically to address its own talc liabilities.

What to do now

A liability carve-out changes who stands behind a claim. Treat that shift as new underwriting information, not background noise.

1. Confirm which legal entity you transact with and whether that entity could become a candidate for a future carve-out.
2. Review your trade credit insurance policy for successor-liability and corporate-restructuring triggers, which vary by carrier and by the policy terms in place when a transfer occurs.
3. Track the financial strength of a standalone liability entity separately from the parent company that sold it, the same way trade credit insurance underwriting treats any change in counterparty structure.
4. Contact Securitas Global Risk Solutions to review how a counterparty’s liability restructuring affects your receivables coverage.

Disclaimer:
This blog post is meant to be informative and provide helpful tips and insights into credit insurance policies. It is not meant to supersede any policy requirements. Please consult your credit insurance policy for all requirements including claim filing deadlines and required documentation.

Since 2004, Securitas Global Risk Solutions, LLC has helped clients develop trade credit and political risk transfer solutions. As an independent brokerage, Securitas is focused on developing comprehensive solutions that meet client needs, ensuring a complete understanding of policy wording and delivering excellent responsive service. If you want to understand how trade credit insurance can protect your business, contact Securitas Global Risk Solutions to speak with a specialist.