Johnson & Johnson (J&J) is facing a critical test in its bid to settle thousands of lawsuits alleging that its baby powder caused ovarian cancer. The company has proposed a $10 billion settlement through a subsidiary’s bankruptcy.
A US bankruptcy judge, Christopher Lopez, will decide whether to approve J&J’s proposal during a weeks-long court hearing. The company is trying to use a subsidiary’s bankruptcy to resolve lawsuits from over 62,000 plaintiffs.
J&J denies that its baby powder and other talc products were contaminated with asbestos and caused cancer. However, courts have rejected the company’s two previous attempts to resolve the talc litigation through a subsidiary’s bankruptcy.
Supporters of J&J’s proposal argue that it offers a faster and fairer way to compensate cancer victims. However, opponents claim that the settlement should not bind those who do not like the terms and would prefer to take their chances in court.
The court hearing will consider evidence on various topics, including the validity of the votes gathered by J&J and whether the company should be allowed to use a subsidiary’s bankruptcy to protect itself from lawsuits.