Juul Labs Inc. has agreed to pay $1.7 billion in a broad legal settlement covering more than 5,000 lawsuits, according to people familiar with the matter.
Many of the lawsuits accused the e-cigarette maker of marketing its addictive products to children and teens. Juul has said it never targeted young people and that it has been working to regain the public’s trust.
The settlement deal, signed earlier this week, resolves much of the legal liability that had pushed the embattled e-cigarette maker to the brink of bankruptcy. The company is now working to settle cases brought by several attorneys general. Once it has resolved most of its legal liabilities, Juul could seek a sale or strategic investment, people familiar with the matter said.
The Food and Drug Administration in June ordered Juul to halt its U.S. sales, saying the company hadn’t submitted sufficient evidence that its e-cigarettes were safe. The agency then put the ban on hold while Juul appealed the decision.
As trial dates loomed, the uncertainty around Juul’s ability to remain on the market made it difficult for the company to raise money for legal settlements or court judgments. The company’s sales also have fallen since the FDA’s move. Juul began preparing for chapter 11 filing this fall, then in November secured financing from some of its early investors to stave off bankruptcy.
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