Johnson & Johnson Stock Drops Nearly 4% in 2025 After Court Denies Bankruptcy Plan for Talc Lawsuits
Johnson & Johnson faces a major setback as a New Jersey judge rejects its bankruptcy strategy to resolve talcum powder cancer claims, impacting stock performance.
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Essential Insights
- Johnson & Johnson’s shares plunged nearly 4% after a court dismissed its bankruptcy approach aimed at settling talcum powder-related litigation.
- The New Jersey Bankruptcy Court twice refused to allow J&J’s subsidiary to declare bankruptcy to manage asbestos claims.
- J&J announced plans to appeal the ruling and vigorously contest the lawsuits, labeling them unfounded.
Johnson & Johnson (NYSE: JNJ) experienced the largest decline on the Dow Jones Industrial Average following the rejection of its bankruptcy proposal designed to address thousands of lawsuits alleging that its talcum powder products caused cancer due to asbestos contamination.
U.S. Bankruptcy Judge Michael Kaplan ruled that the company is not in immediate financial distress, thereby denying the motion for Chapter 11 protection for J&J’s subsidiary, LTL Management.
The strategy involved transferring liabilities to LTL Management, which would file for bankruptcy and establish an $8.9 billion settlement fund to resolve current and future claims. This plan was previously dismissed by a Philadelphia court in early 2024.
Despite renewed attempts citing increased plaintiff support, the court maintained that bankruptcy relief was unwarranted. J&J remains committed to appealing the decision while defending itself against what it describes as meritless claims.
The stock’s downturn reflects ongoing investor concerns, with J&J shares underperforming throughout 2023 and into 2024.
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