Judge Rejects J&J's $9B Talc Bankruptcy Plan

A U.S. bankruptcy judge has rejected Johnson & Johnson's third attempt to use bankruptcy to settle tens of thousands of lawsuits alleging that its talc-based baby powder causes cancer. The proposed $9 billion settlement plan, facilitated through a J&J subsidiary, Red River Talc, was dismissed due to a flawed voter solicitation process and was deemed to be in bad faith. This decision forces J&J to revert to the civil court system to address the claims, which the company maintains are meritless and based on junk science. Despite previously settling various state claims and consumer protection issues, J&J's stock fell more than 3% following the ruling. The company, which ceased selling talc-based baby powder in the U.S. in 2020, will not appeal the decision but plans to litigate each case individually. Critics argue that J&J's bankruptcy strategies, including the 'Texas Two Step,' were attempts to evade full accountability.