A three-judge panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals ruled to dismiss Johnson & Johnson's (NYSE: JNJ) subsidiary's bankruptcy case regarding talc-related claims.
The panel said it had no legitimate claim to Chapter 11 protection because it did not face financial distress.
U.S. Bankruptcy Judge Michael Kaplan said during a hearing in Trenton, New Jersey, that he intends to toss the Chapter 11 case once the Philadelphia-based 3rd U.S. Circuit Court of Appeals issues a formal mandate to carry out a January 30 ruling by a three-judge panel to dismiss the matter.
The decision would force J&J back into trial courts to battle nearly 40,000 lawsuits alleging the company's Baby Powder and other cosmetic products containing talc cause cancer, Reuters reported.
U.S. Bankruptcy Judge Michael Kaplan was set to preside over the hearing for LTL Management, the subsidiary.
LTL on Monday asked the full 3rd Circuit to reconsider the decision by the three-judge panel.
In 2021, J&J offloaded several talc lawsuits it faced onto one of its newly created units, LTL, which then declared bankruptcy, the process known as Texas two-step.
J&J has argued that the lawsuits posed a severe financial threat that could potentially cost about $4.5 billion, with no end in sight, according to bankruptcy-court filings.
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