A U.S. judge on Friday shot down Johnson & Johnson’s second attempt to resolve tens of thousands of lawsuits over its talc products in bankruptcy, imperiling a proposed $8.9 billion settlement that would stop new lawsuits from being filed.
U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey, ruled that a J&J company’s second bankruptcy, like its first, must be dismissed because the talc lawsuits did not put it in immediate “financial distress.”
“In sum, this Court smells smoke, but does not see the fire,” Kaplan wrote, referring to the J&J unit LTL. “Therefore, the emphasis on certainty and immediacy of financial distress closes the door of chapter 11 to LTL at this juncture.”
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