Johnson & Johnson Faces Setback in Talc Litigation

In a significant legal setback, Johnson & Johnson (J&J) saw its shares decline by over 3% after a US Bankruptcy Judge rejected the company's proposed $10 billion settlement to resolve thousands of lawsuits. These lawsuits allege that J&J's baby powder and other talc-based products are linked to ovarian cancer.

Judge's Ruling Challenges J&J's Bankruptcy Strategy

Judge Christopher Lopez ruled that J&J does not belong in bankruptcy, marking the third failure in the company's attempts to settle the claims through this legal avenue. Despite J&J's argument that the increased settlement amount should warrant approval, opponents successfully argued that the company is not in "financial distress," leading to the proposal's dismissal.

Market Reacts to Legal Developments

The immediate market reaction was negative, with J&J's shares dropping by 3.04% in premarket trading, settling at $160.80 per share. This development underscores the ongoing challenges J&J faces in addressing its talc-related legal battles.