Philips

Royal Dutch Philips N.V. - Koninklijke Philips N.V. (“Philips”) is the Dutch parent company of the Philips Group and specialises in professional healthcare solutions and health technology. Philips’ common shares are listed on the Amsterdam and New York stock exchanges.

On 26 April 2021 Philips, for the first time, announced a quality issue that related to the polyester-based polyurethane (PE-PUR) sound abatement foam degradation that was used in specific Philips Bi-Level Positive Airway Pressure devices (Bi-Level PAP), Continuous Positive Airway Pressure (CPAP) devices and certain mechanical ventilator devices.

The quality issue led to a substantial recall and remediation operation. Furthermore, between 26 April 2021 and 8 November 2022 provisions for more than EUR 700 million had to be recorded in connection with the recall and significant costs were incurred as a result of corrective actions. Philips’ sales and income were also negatively affected. Additionally, a large amount of consumer class actions, commercial class actions and personal injury lawsuits have been filed in the U.S. in relation to affected devices that were recalled by Philips as from June 2021. Finally, the issue received regulatory scrutiny both in the U.S. and outside the U.S.

Philips’ stock price lost close to 75% (or EUR 37,36) partly because of these events.

Our internal investigation has uncovered multiple findings indicating that Philips was, or should have been, aware of the quality issue well before April 26, 2021, and neglected to promptly disclose it to the relevant authorities and the market.

On 7 September 2023, Philips reached a resolution of U.S. economic loss litigation. Philips Respironics, a U.S. subsidiary of the Philips Group, recorded a preliminary provision for an amount of EUR 575 million to cover for the estimated costs of this settlement. Philips also announced on 29 January 2024 that it had agreed on the terms of a consent decree with the US Department of Justice (DOJ), representing the US Food and Drug Administration (FDA), in relation to the quality issue and certain findings by the FDA. Finally, on 29 April 2024 Philips announced another settlement to resolve the personal injury litigation and the medical monitoring class action in the U.S. As a consequence, a EUR 982 million provision was recognised in Q1 2024. Other civil litigation continues.

Deminor has currently assembled a substantial consortium of institutional investors for our fully financed recovery action in the Netherlands. The group represents a significant loss. The deadline for registration has lapsed, but registration is still possible upon request.