A US bankruptcy judge has rejected Johnson & Johnson’s $10 billion proposal to settle lawsuits claiming its baby powder and talc products caused ovarian cancer. This is the third time the company’s bankruptcy strategy has failed in court.
J&J attempted to resolve the lawsuits through a subsidiary’s bankruptcy, after two previous attempts failed. However, US Bankruptcy Judge Christopher Lopez ruled that the company did not belong in bankruptcy, stating the settlement lacked support from affected women and improperly released claims against non-bankrupt entities, like retailers and Kenvue, J&J’s spun-off business.
J&J said it would not appeal the decision but would return to the court system to fight the claims.
Opponents, including cancer victims’ attorneys, argued that J&J, a financially strong company, should not use bankruptcy to avoid facing victims in court. They also criticized the voting process, claiming it was flawed and rushed.
J&J faces lawsuits from over 60,000 claimants, alleging its talc products contained asbestos and caused cancer. The settlement would have resolved these lawsuits and blocked future claims. J&J insists its products are safe and do not contain asbestos.
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