Johnson & Johnson (J&J) has secured support for its proposed $6.5-billion settlement aimed at resolving tens of thousands of lawsuits that allege its baby powder and other talc products caused cancer.
According to a Bloomberg report, more than 75% of claimants have voted in favor of the settlement, reaching the threshold J&J set for its third attempt to place its subsidiary into bankruptcy protection to address the litigation.
Reuters reported that it could not independently verify the Bloomberg report, but sources familiar with the voting process said the tally is still ongoing.
J&J has previously expressed optimism that the settlement proposal would gain sufficient support to move forward.
The healthcare giant faces lawsuits from approximately 61,000 claimants who allege that asbestos contamination in its talc products led to ovarian and other cancers.
J&J has consistently denied these allegations, saying that its products are safe.
The 75% approval rate is critical, as it aligns with a U.S. bankruptcy law provision required for J&J's planned "Texas two-step" bankruptcy strategy.
The deadline for casting votes was July 26, and with the necessary support now reportedly secured, J&J is expected to proceed with its bankruptcy bid soon.
J&J's strategy involves creating a new subsidiary to absorb its talc liabilities, which then files for Chapter 11 bankruptcy.
This legal maneuver aims to consolidate all claims into one settlement without J&J itself declaring bankruptcy.
By doing so, J&J hopes to prevent any ongoing or future lawsuits that could result in substantial financial judgments against the company.
Despite the reported progress, the strategy faces stiff opposition.
Critics, including plaintiffs' attorney Andy Birchfield, have dismissed the voting process as a "fake bankruptcy election" and predict that any announced tally will face legal challenges.
Birchfield argues that the settlement should be rejected in favor of allowing juries to determine J&J's liability.
J&J's current bankruptcy strategy differs from previous attempts by concentrating on ovarian and gynecological cancer claims, building on earlier settlements with state attorneys general and mesothelioma plaintiffs.
However, the company's approach still faces significant legal hurdles.
The U.S. Supreme Court recently ruled against broader protections in the Purdue Pharma bankruptcy case, which could influence the outcome of J&J's plan. In June, the U.S. Supreme Court rejected a controversial bankruptcy deal involving Purdue Pharma, which makes painkiller Oxycontin, and members of the Sackler family who owned the scandal-plagued drug firm.
