A U.S. bankruptcy judge rejected Johnson & Johnson's $10 billion plan on Monday to resolve thousands of lawsuits claiming its baby powder and other talc products caused ovarian cancer, marking the third time the company's bankruptcy strategy has been denied in court, reports Reuters.
J&J has been attempting to resolve the lawsuits through a subsidiary company’s bankruptcy, after two previous bankruptcy attempts failed in other courts.
But the judge overseeing its case, US Bankruptcy Judge Christopher Lopez in Houston, said that the company did not belong in bankruptcy.
"While the Court’s decision is not an easy one, it is the right one," Lopez wrote.
Lopez said J&J's proposed settlement did not have sufficient support from women who alleged J&J products caused their cancer. It also went too far in releasing legal claims against entities that had not filed for bankruptcy themselves, including retailers that sold J&J products and Kenvue, a consumer health business that J&J spun off in 2023. The proposal had too many problems to be fixed in bankruptcy, Lopez wrote.
J&J said in a statement that it would not appeal, but also that it had no intention of settling the claims and would instead "return to the tort system to litigate and defeat these meritless talc claims."
Andy Birchfield, an attorney who represents plaintiffs opposed to the bankruptcy settlement, said that J&J's bankruptcy strategy was "nothing more than a bad-faith manoeuvre to avoid full accountability.”
“With this ruling, we are now moving forward without delay to trial, where our clients will finally have the chance to present their cases before a jury and obtain the justice they deserve,” Birchfield said.
J&J had argued that the third proposal, in Texas bankruptcy court, should succeed because there was more money on the table and the deal was supported by a majority of cancer victims who voted on it.
Bd-pratidin English/ Afia
