April 1 - A Federal Bankruptcy Court Judge has rejected Johnson & Johnson's (JNJ, Financial) latest bankruptcy maneuver, sending its shares sliding about 5% on Tuesday morning.
Judge Christopher Lopez ruled that the company's attempt to use bankruptcy, filed under different names like Red River, was nothing more than a delay tactic. This decision clears the way for victims, who have long linked J&J's talcum powder to ovarian cancer, to move forward with jury trials in state courts and through the bellwether process in multidistrict litigation.
Attorneys for the Coalition of Counsel for Justice hailed the ruling as a win for fairness. “This decision shuts down the abuse of the bankruptcy process and gives our clients a real chance to get justice,” said one lead attorney.
J&J, despite its strong market capitalization nearing $400 billion, has repeatedly used bankruptcy filings to sidestep liability. Opposition from the U.S. Trustee's Office, the Department of Justice, and others led to today's decision, leaving investors and claimants with a clearer path to accountability.
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