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UPDATE: Johnson & Johnson's Proposed Solution to Bankruptcy Dismissed Once More

Johnson & Johnson's continuous attempts to elude going to trial over talc and asbestos accusations were thwarted again, leaving the company in a precarious state as they confront over tens of thousands of legal claims. These claims stem from Johnson & Johnson's talc Baby Powder and allegations concerning asbestos exposure.

The $8.9 billion bankruptcy settlement proposal by Johnson & Johnson was turned down, and the case was dismissed by Judge Michael Kaplan of the U.S. Bankruptcy Court for the District of New Jersey. In his court filing, the judge stated that Johnson & Johnson is not under any "immediate or imminent financial distress." The substantial amount of $8.9 billion that Johnson & Johnson suggested was intended to resolve all ongoing and future lawsuits tied to their now-ceased talc-based Baby Powder.

As reported by the New York Times, Johnson & Johnson is facing an estimated 60,000 cases. These cases involve consumers who used the talc product on themselves, their children, or other family members, later developing cancer or other health-related issues. Johnson & Johnson Baby Powder, as well as other products like Johnson & Johnson Shower-to-Shower body powder, can be contaminated with asbestos, leading to a rare and severe form of cancer called mesothelioma.

Most of the current legal cases against Johnson & Johnson related to their Baby Powder are connected to patients with mesothelioma or the families of individuals who have died from this intense form of cancer. Roughly 38,000 lawsuits were suspended when Johnson & Johnson initiated bankruptcy proceedings nearly two years ago.

The stalled lawsuits might now be permitted to move forward, possibly forcing Johnson & Johnson to confront these victims in court and rightfully compensate them for causing their illness.

Angela C. Bullock, a mesothelioma lawyer at Bullock Campbell Bullock & Harris, PC, expressed optimism over the ruling, criticizing courts' previous leniency with financially robust corporations' bankruptcy filings. She expressed hope that this second dismissal may signal a change in judges' scrutiny of such filings.

Asbestos Contamination in Johnson & Johnson Baby Powder

Talc, a naturally occurring mineral in the earth, has been the primary ingredient in Johnson & Johnson's Baby Powder for many years. This powder can sometimes include trace levels of sharp asbestos fibers capable of puncturing cell linings, explaining how asbestos contaminates Johnson & Johnson Baby Powder and poses health risks.

Johnson & Johnson's Bankruptcy Attempts

Years of legal challenges regarding asbestos exposure led to investigations into Johnson & Johnson's Baby Powder. These tests revealed traces of asbestos, resulting in product recalls. Johnson & Johnson ceased manufacturing the talc version of the product globally in 2022, proposing a cornstarch-based variant as a safe replacement.

Johnson & Johnson has been attempting to shift its talc and asbestos liabilities to a bankrupt subsidiary, LTL Management, specifically created for bearing all legal liabilities related to the company's talc-based Baby Powder. This approach, a Chapter 11 bankruptcy tactic known as the "Texas Two-Step," raised questions about the ethics of such a maneuver.

After a rejection by the U.S. Court of Appeals for the Third Circuit in Philadelphia, a second proposal was filed shortly after the first was rebuffed. The most recent $8.9 billion proposal marks Johnson & Johnson's second unsuccessful attempt.

Plaintiffs have asked for a six-month ban on any future bankruptcy filings for LTL Management to avoid further delays in pending litigation through a third bankruptcy attempt.

Latest Ruling Against Johnson & Johnson

While deliberation on the bankruptcy proposal was ongoing, a lawsuit against Johnson & Johnson was permitted to proceed. The company lost a case where a man diagnosed with a rare type of cancer was awarded $18.8 million, a decision likely to be appealed.

If you or someone close to you has mesothelioma and used Johnson & Johnson Baby Powder in the past, you may be entitled to compensation. Many substantial verdicts have been awarded to mesothelioma victims in cases against Johnson & Johnson.