Johnson & Johnson Faces Third Bankruptcy Litigation Test: A $10 Billion Gamble

Johnson & Johnson seeks approval for a $10 billion proposal to resolve lawsuits alleging its baby powder caused ovarian cancer. The company hopes a subsidiary's bankruptcy will settle cases from over 62,000 plaintiffs. Previous attempts failed, and criticism arises over the voting process's integrity.

Johnson & Johnson is once again confronting a pivotal moment as it attempts to settle lawsuits linked to its baby powder's alleged cancer risks. The pharmaceutical giant has put forth a $10 billion proposal, seeking the court's approval to finalize the longstanding litigation through a subsidiary's bankruptcy proceedings.

U.S. Bankruptcy Judge Christopher Lopez in Houston will deliver a decision after extensive hearings weighing the merits of resolving claims via a Chapter 11 process. J&J's subsidiary, Red River Talc, claims significant support from plaintiffs, but detractors argue the voting process was engineered in the company's favor.

Despite previous failed attempts, J&J remains determined, emphasizing that bankruptcy provides a quicker, fairer route for cancer victims than court battles. Critics, however, accuse J&J of exploiting bankruptcy laws to coerce less favorable settlements. The outcome of this legal battle will have significant implications for future litigation strategies.

(With inputs from agencies.)