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J&J proposal would end lawsuits linking its baby powder to

ovarian cancer

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J&J's two previous attempts at a bankruptcy deal failed in

other

courts

By Dietrich Knauth

NEW YORK, March 31 (Reuters) - A U.S. bankruptcy judge

on Monday rejected Johnson & Johnson's ( JNJ ) $10 billion

proposal to end lawsuits alleging that its baby powder and other

talc products cause ovarian cancer, marking the third time the

company's bankruptcy strategy has failed in court.

J&J has been attempting to resolve the lawsuits through a

subsidiary company's bankruptcy, after two previous bankruptcy

attempts failed in other courts. But the judge overseeing its

case, U.S. Bankruptcy Judge Christopher Lopez, said that the

company did not belong in bankruptcy.

"While the Court's decision is not an easy one, it is the

right one," Lopez wrote. "The Court hopes something gets done

for J&J, Red River, and claimants who also want finality on

their cases."

J&J argued that the third proposal, in Texas bankruptcy

court, should succeed because there is more money on the table

and the deal is supported by a majority of cancer victims who

voted on it.

Opponents of the deal, including attorneys for some cancer

victims and a government bankruptcy watchdog, had argued that

the third bankruptcy, like the first two, should be dismissed

because the company is not in "financial distress." A wealthy

company like J&J should not use bankruptcy to prevent cancer

victims from having their day in court, opponents said.

J&J faces lawsuits from over 60,000 claimants alleging that

its baby powder and other talc products contained asbestos and

caused ovarian cancer, which the company denies. The settlement

would have ended those lawsuits and prevent similar lawsuits

from being filed in the future.