Johnson & Johnson: J&J Stock Slumps as Company Fails to Settle Talc Cases

In This Article: Cristina Arias / Cover / Getty Images KEY TAKEAWAYS Johnson & Johnson shares fell Tuesday, after the company said a judge rejected its proposed "prepackaged bankruptcy plan" for a subsidiary to settle thousands of claims alleging its baby powder and other talc products cause ovarian cancer. The company said that it will now go back to the tort system "to litigate and defeat" the claims. Johnson & Johnson had tried twice before, in 2021 and 2023, to use the bankruptcy system to settle the claims. Johnson & Johnson ( JNJ ) shares fell Tuesday after the company said a judge rejected its proposed "prepackaged bankruptcy plan" for a subsidiary, as part of its latest attempt to use a bankruptcy court to settle thousands of claims alleging its baby powder and other talc products cause ovarian cancer. Shares of Johnson & Johnson were down around 5% in recent trading, among the stocks leading declines on the S&P 500. The company, which has long held that the talc-related claims hold no merit , said Monday that it will now go back to the "tort system to litigate and defeat" the claims and would reverse around $7 billion it had set aside to resolve the bankruptcy. "The Court has unfortunately allowed a couple of law firms with financially conflicted motives, who have conceded they have not recovered a dime for their clients in a decade of litigation, to defeat the overwhelming desire of claimants," said Erik Haas, worldwide vice president of litigation at Johnson & Johnson. "The decision to litigate every filed case is based on the simple fact that this is a fake claim created by greedy plaintiff lawyers looking for another deep pocket to sue and fueled by litigation-financed attorney advertising," he added. Johnson & Johnson has tried twice before, in 2021 and 2023, to use the bankruptcy system to settle the claims. Read the original article on Investopedia Cristina Arias / Cover / Getty Images