| NEW YORK, July 17
NEW YORK, July 17 Johnson & Johnson has
agreed to pay $22.9 million to end a lawsuit from investors who
claimed the company concealed quality-control failures that
culminated in a broad recall of children's medicines, according
to court filings.
The proposed settlement was filed Monday in a U.S. federal
court in New Jersey, and must be approved by the judge
overseeing the case. Johnson & Johnson did not admit any
liability or wrongdoing in the settlement, court filings said.
"We maintain that the claims in this action are without
merit, and settled this case in order to avoid the expense,
distraction and time associated with continuing litigation,"
Johnson & Johnson spokesman Ernie Knewitz said in a statement.
Johnson & Johnson took more than 40 nonprescription products
off store shelves in 2010, including Children's Tylenol, in what
the U.S. Food and Drug Administration has characterized as the
largest recall of children's medicine in the agency's history.
The recalls came after FDA inspectors found multiple
problems at the company's Fort Washington, Pennsylvania, plant,
including bacterial contamination of ingredients and filthy
equipment. The facility was later shut down.
Shareholders filed a proposed class action against the
company several months later, saying Johnson & Johnson cut back
on quality-control measures prior to the recalls, and took steps
to conceal that from investors and the public. Once the extent
of the recalls came to light, share prices fell, investors said.
The company was also accused of trying to avoid publicity by
concealing facts about the recalls, including the orchestration
of a "phantom recall" of Motrin products, in which third-party
contractors covertly removed suspect containers from stores.
The proposed settlement "provides a substantial benefit to
the class and is a favorable result," plaintiffs said in the