NEW YORK, Aug 12 (Reuters) - Johnson & Johnson ( JNJ )

has cleared a key threshold of support for its proposed

$6.5-billion settlement of tens of thousands of lawsuits

alleging its baby powder and other talc products caused cancer,

according to a Bloomberg report.

More than 75% of claimants voted in favor of the proposal,

according to Bloomberg, a hurdle J&J set for a third attempt at

placing a subsidiary in bankruptcy protection to resolve the

litigation.

Reuters has not independently verified the report, for which

Bloomberg cited sources familiar with the negotiations. Sources

who spoke with Reuters said the votes are still being tallied.

J&J spokesperson Clare Boyle said the company could not

comment as the vote tally was not final. The company has

previously expressed confidence that its settlement proposal

would ultimately win enough support from plaintiffs to proceed.

J&J faces lawsuits from about 61,000 claimants who alleged

that its baby powder and other talc products were contaminated

with asbestos and caused ovarian and other cancers. J&J denies

the allegations and has said that its products are safe.

The company set the 75% vote percentage, matching a

provision in U.S. bankruptcy law, as the benchmark to proceed

with another bankruptcy bid, which now is expected in the near

future. The deadline for casting votes was July 26.

After being rebuffed twice by federal courts, the healthcare

giant is attempting again to end the litigation in a so-called

"Texas two-step" bankruptcy.

The "two-step" maneuver involves offloading its talc

liability onto a newly created subsidiary, which then declares

Chapter 11. The goal is to use the proceeding to force all

plaintiffs into one settlement - without requiring J&J itself to

file bankruptcy.

But the company needs the votes of 75% of claimants before

the subsidiary can ask a bankruptcy judge to impose the deal on

all of them.

Bankruptcy judges can enforce global settlements that

permanently halt all related lawsuits and forbid new ones.

Outside of bankruptcy, any settlement J&J reached with some

clients would still leave holdouts or future plaintiffs with the

right to sue - and leave the company exposed to potential

multibillion-dollar verdicts that encouraged it to use a

two-step in the first place.

The company has been engaged in a bitter fight with lawyers

opposing its third attempt to settle the litigation through this

maneuver.

Andy Birchfield, who represents plaintiffs opposed to the

settlement, called J&J's voting process a "fake bankruptcy

election" that would not stand up in court.

"No matter what tally is announced, I expect it will be

challenged and eventually rejected so that juries can decide

what to do about J&J's egregious conduct," Birchfield said.

J&J's third attempt at a bankruptcy settlement differs from

its previous efforts in part because it focuses only on ovarian

and other gynecological cancer claims, building on J&J's

previous settlements with state attorneys general and people who

had sued after developing mesothelioma, a rare form of cancer

linked to asbestos exposure.

J&J's bankruptcy strategy still faces legal hurdles. The

Supreme Court recently ruled in Purdue Pharma's bankruptcy to

narrow the ability of courts to stop lawsuits against people and

companies like J&J that are not bankrupt without the consent of

the people who have sued.

J&J has said the Purdue ruling does not affect its

settlement proposal because U.S. bankruptcy law includes

explicit legal protections for asbestos defendants that have not

filed for bankruptcy. J&J has said it qualifies for those

protections because the lawsuits generally allege that the talc

used in its products was mined from underground mineral deposits

that also contained asbestos.

Some legal experts have said that J&J may not qualify for

those specific legal protections, which were written to

encourage settlement payments by insurers with indirect

liability for asbestos lawsuits.

J&J's strategy also faces opposition from plaintiffs'

attorneys who argue that its new settlement should fail for the

same reason as its first two. Courts rejected J&J's first two

talc bankruptcies because the subsidiary was not in "financial

distress," and J&J must overcome similar arguments in this

bankruptcy attempt.

Congress has proposed legislation that would limit the

ability of companies to shield themselves from lawsuits by

putting a shell company into bankruptcy.