J&J Closes in on $6.5 Billion Cancer Settlement Amid Legal Hurdles

Johnson & Johnson has reached a significant level of support for a proposed $6.5 billion settlement to address lawsuits claiming its talc products caused cancer. Over 75% of claimants have voted in favor, enabling a renewed attempt at bankruptcy protection. The proposed maneuver, however, faces legal challenges and opposition from plaintiffs' attorneys.

Johnson & Johnson has crossed a critical threshold for its $6.5 billion settlement proposal to resolve tens of thousands of lawsuits alleging its talc products caused cancer. According to Bloomberg, over 75% of claimants have voted in favor, meeting the company's self-imposed benchmark for proceeding with a third bankruptcy protection attempt aimed at ending the litigation.

The company faces legal battles from about 61,000 claimants who allege that its baby powder and other talc products were contaminated with asbestos, leading to ovarian and other cancers. Johnson & Johnson has consistently denied these allegations, maintaining that its products are safe. J&J spokesperson Clare Boyle declined to comment while the vote tally is not final.

J&J's subsidiary, LLT Management, was created to shield the parent company from talc-related liabilities. The 'Texas two-step' bankruptcy maneuver involves offloading liabilities to a subsidiary, which then declares Chapter 11. Despite the 75% claimant approval, the strategy faces legal hurdles and opposition from plaintiffs' attorneys and may be affected by recent Supreme Court rulings.

(With inputs from agencies.)