On this photo illustration, a container of Johnson and Johnson baby powder is displayed on April 05, 2023 in San Anselmo, California.
Justin Sullivan | Getty Images
A federal bankruptcy judge on Friday rejected Johnson & Johnson‘s second attempt to resolve tens of 1000’s of lawsuits alleging the corporate’s talc baby powder and other talc-based products caused cancer.
J&J in 2021 offloaded those talc liabilities into a recent subsidiary, LTL Management, and immediately filed for Chapter 11 bankruptcy protections.
Judge Michael Kaplan in Trenton, Recent Jersey, said in an opinion that LTL Management’s second bankruptcy should be dismissed since the subsidiary was not in “imminent” or “immediate financial distress.” A U.S. appeals court in April dismissed the primary bankruptcy attempt over the identical reason.
The choice jeopardizes J&J’s proposed $8.9 billion settlement that will stop recent lawsuits from being filed. The corporate previously said greater than 60,000 claimants have already committed to voting in favor of the plan.
J&J said LTL Management intends to appeal the choice.
“LTL commenced its bankruptcy case in good faith and in strict compliance with the Bankruptcy Code,” the corporate said in a statement.
“The Bankruptcy Code doesn’t require a business to be engulfed in ‘flames’ to seek a reorganization supported by the overwhelming majority of claimants,” added Erik Haas, J&J’s worldwide vice chairman of litigation.
J&J contends that research and clinical evidence demonstrates that its talc products remain protected.