Johnson & Johnson Faces Critical Test in Bankruptcy Hearing
New York, NY - Johnson & Johnson (J&J) will face scrutiny on Tuesday as it seeks court approval for its $10 billion settlement proposal in a sweeping bankruptcy case involving allegations that its baby powder caused ovarian cancer.
US Bankruptcy Judge Christopher Lopez in Houston will preside over a weeks-long hearing to determine the fate of J&J's Chapter 11 petition. The company seeks to resolve lawsuits from over 62,000 plaintiffs who claim its talc products contained asbestos and led to cancer. J&J denies these allegations.
J&J's previous attempts to use subsidiary bankruptcies to settle the talc litigation have been rejected by courts. However, the company argues that its current proposal has garnered broad support from claimants, increasing its chances of success.
Opponents criticize the settlement, claiming it unfairly limits the recovery of victims who oppose its terms. They argue that J&J should face individual lawsuits rather than shielding itself through bankruptcy.
The hearing will feature testimony from plaintiffs' attorneys who support and oppose the deal. J&J maintains that bankruptcy provides a swift and equitable path to compensate cancer victims who might otherwise face protracted and uncertain legal battles.
The judge will consider the validity of J&J's votes of support, as well as the propriety of a wealthy company utilizing subsidiary bankruptcies as a litigation defense.
The outcome of the hearing will impact the fate of thousands of lawsuits against J&J and could potentially prevent future talc-related claims.