A Texas Judge Says Denies J&J's Third Attempt At Bankruptcy

Another bankruptcy plan that would have protected J&J from growing claims over talc-related cancer has been blocked by a federal judge

Thursday, June 26, 2025 - A Texas federal judge has turned down J&J's third request to utilize bankruptcy proceedings to deal with the mounting number of talcum powder cancer claims against the firm. This is a big legal blow for the company. The decision stops a contentious business move that tried to avoid financial risk by putting legal claims into a new company and imposing a negotiated settlement under bankruptcy court protections. The complaints against the corporation say that it didn't tell people about the cancer risks of using talc for a long time, especially the fact that its products might contain asbestos fibers. A lawyer for the talcum powder case said that this latest denial shows that the courts would not let solvent companies use bankruptcy as a way to avoid full legal responsibility. The lawsuits over talcum powder cancer are still some of the biggest and most complicated mass tort cases in the country, with thousands of people claiming to have been seriously hurt. Plaintiffs say that the company's repeated bankruptcy filings have mostly been used to prolong trials and force victims to accept smaller settlements, rather than adequately answering the scientific and moral problems at the heart of the lawsuits.

The U.S. says the judge in the Bankruptcy Court for the Southern District of Texas said that J&J's proposed bankruptcy plan did not meet the legal requirements for good-faith bankruptcy filings. He also said that the corporation is still financially strong and can handle claims through the ordinary court system. The court made it clear that bankruptcy protections were not meant for firms that are making money and want to dodge the effects of huge judgment awards. Lawyers who work on talcum powder cancer claims say this ruling makes it easier for them to keep working on cases in multidistrict litigation and state courts, where juries may see all the evidence. The decision also backs up recent criticism from the U.S. The Department of Justice used to say that letting solvent firms mess with the bankruptcy system hurts people's trust in the legal system. With the Texas court's decision, J&J is under further pressure to either settle openly or go to trial on thousands more claims that are still pending. Consumer advocates are calling the verdict a win for victims who have been waiting years for their claims to move forward. The rejection of this most recent bankruptcy attempt may also make other companies less likely to use similar legal strategies in future mass tort cases. This shows that the courts are becoming less willing to accept bankruptcy moves that seem to be mostly focused on avoiding responsibility for public health harms.

A Texas federal judge has turned down J&J's third effort to file for bankruptcy to deal with its growing number of talcum powder cancer claims, saying it was not legally warranted. Lawyers for people with talcum powder cancer said the decision protects victims' rights to full trials and appropriate compensation. The U.S. Bankruptcy Court made it clear that solvent businesses can't use bankruptcy protections just to protect their finances. This decision may change how mass tort lawsuits are handled across the country. It shows that judges are becoming less willing to let companies use bankruptcy to avoid or lower their responsibilities. J&J is now under even more legal and financial pressure to settle thousands of pending lawsuits because bankruptcy is not an option.