Johnson & Johnson’s (NYSE: JNJ) most recent appeal to settle all talc lawsuits for $8.9 billion and file for bankruptcy under its subsidiary, LTL Management, was denied on July 30, 2023. This is the second time this year that a U.S. Judge has rejected the company’s attempt to resolve tens of thousands of talc-related lawsuits through bankruptcy.
The bankruptcy court ruled that the lawsuits did not place J&J in “imminent or immediate financial distress,” which is a requirement for bankruptcy protection.
This is the second time J&J’s bankruptcy bid under LTL Management has been denied this year, and the third attempt overall since 2021.
J&J has stated its intention to appeal the decision. The company faces tens of thousands of lawsuits claiming its talc-based baby powder contained cancer-causing asbestos.
The proposed settlement would have provided $8.9 billion to resolve all current and future talc claims.
The denial of the bankruptcy filing means that the talc lawsuits will continue to move forward in the civil court system.
A recent California verdict awarding $18.8 million to a plaintiff with mesothelioma (linked to asbestos exposure) could potentially influence other plaintiffs to reject the proposed settlement amount