*

J&J seeks to resolve tens of thousands of lawsuits linking

baby

powder to ovarian cancer

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Judge to decide whether to approve deal or end J&J unit's

bankruptcy

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J&J says deal has enough support to succeed after two

previous

failures

By Dietrich Knauth

NEW YORK, Feb 18 (Reuters) - Johnson & Johnson ( JNJ )

faces a critical test on Tuesday over its $10 billion proposal

to end litigation alleging that its baby powder caused ovarian

cancer, as it tries to convince a judge to sign off on its third

attempt to resolve thousands of lawsuits through a subsidiary's

bankruptcy.

U.S. Bankruptcy Judge Christopher Lopez in Houston will

decide the fate of the company's latest Chapter 11 during a

weeks-long court hearing weighing competing demands to approve

the settlement or end the bankruptcy altogether.

J&J is attempting to use a subsidiary's bankruptcy to

resolve lawsuits from more than 62,000 plaintiffs alleging its

baby powder and other talc products were contaminated with

asbestos and caused ovarian and other cancers, a claim that J&J

denies.

Courts have rejected J&J's two previous efforts to resolve

the talc litigation through a subsidiary's bankruptcy, but the

company is trying again in a different bankruptcy court. It says

the third effort can succeed where the others faltered because

it now has votes showing a broad level of support for its

settlement proposal.

The judge will listen to supporters and opponents of J&J's

bankruptcy proposal in a marathon court hearing that will last

until the end of February.

Lopez will consider evidence on a wide range of topics,

including the validity of the votes that J&J gathered last year

and whether such a wealthy company should be able to use a

subsidiary's bankruptcy to protect itself from lawsuits.

J&J argues that bankruptcy offers a faster and fairer way to

put money into the hands of cancer victims, who would otherwise

face lengthy legal battles in a "lottery-like" court system that

results in large verdicts for some plaintiffs and nothing for

others.

Erik Haas, J&J's vice president for litigation, said in a

statement that the bankruptcy proposal has "overwhelming

support" from cancer victims and "affords claimants a far better

recovery than they stand to recover at trial."

Opponents of the deal argue that the bankruptcy settlement

should not bind those who do not like the terms and would prefer

to take their chances in court.

By pushing the deal through a subsidiary's bankruptcy, J&J

is trying to force women with ovarian cancer to accept lower

settlement payments based on a deeply flawed vote, according to

opponents.

The key witnesses in the hearing will include plaintiffs'

lawyers who support and oppose the deal.

J&J has turned to bankruptcy to end the litigation, because

U.S. bankruptcy law allows such a deal to bind claimants who

would prefer to litigate their cases. A bankruptcy settlement

would also prevent new talc lawsuits from being filed against

J&J in the future.