Courts Have Repeatedly Stopped J&J's Bankruptcy Efforts Because Of Claims About Talc And Ovarian Cancer

Johnson & Johnson has tried to file for bankruptcy many times, but courts have always turned them down

Monday, September 22, 2025 - One of the most popular legal methods in the baby powder ovarian cancer lawsuits has been to try to use bankruptcy courts to handle debts. Johnson & Johnson set up a separate company to handle talc claims and then filed for bankruptcy for that company. This is frequently nicknamed the "Texas Two-Step." The business said that this was the best approach to settle tens of thousands of cases filed by women with ovarian cancer and families affected by mesothelioma. However, courts have consistently ruled against the move, saying it doesn't meet the legal requirement for financial distress. Because of this, trials are still going on, and survivors are finding new reasons to fight for justice. Many people are getting in touch with a talcum powder cancer lawyer to learn more about their rights. Others have already joined a talcum powder cancer case in the goal of holding someone accountable. The fact that judges keep turning down bankruptcy petitions demonstrates that they are becoming more inclined to stop businesses from using restructuring strategies to avoid paying their debts. Legal experts argue that this spate of losses could create a precedent for future mass tort suits, making it harder for big businesses to avoid consumer claims.

The U.S. Court of Appeals for the Third Circuit said that one of the most important decisions was when judges decided that J&J's subsidiary wasn't really in financial distress because its parent firm had so many resources. The court's judgment was based on the legal criterion that bankruptcy protection is only for businesses that are really in trouble. Federal papers show that Johnson & Johnson has tried this strategy many times, but courts have become more and more skeptical each time. In one decision, the court made it clear that allowing this kind of bankruptcy would help profitable companies dodge jury proceedings by setting up fake companies. Regulators, public health organizations, and lawmakers are also paying attention, because the results of these cases have an impact on larger discussions about protecting consumers and holding businesses accountable. Even if people are trying to go bankrupt, fresh cases keep coming in. Federal records show that tens of thousands of cases are still open, with many plaintiffs saying that decades of using vaginal talc caused their ovarian cancer. Studies on public health, particularly recent ones from the National Institutes of Health, keep finding links that support the allegations. All sides are feeling the legal pressure: plaintiffs want trials, judges want fairness, and lawmakers are starting to think about changes that will remove such gaps in the future.

The fact that courts keep turning down J&J's bankruptcy efforts shows that they will put fairness ahead of convenience. The corporation may say that bankruptcy is the best way to solve the problem, but survivors and their families regard it as a method to get out of paying their debts. This pattern of decisions could change the way the law works in the US when it comes to holding companies accountable in the future.