Johnson & Johnson Plunges 3.08% as Talc Settlement Rejected

On April 1, 2025, Johnson & Johnson's stock dropped by 3.08% in pre-market trading, reflecting significant market sentiment shifts.

Johnson & Johnson faced a major setback as a U.S. bankruptcy judge rejected the company's third attempt to resolve talc-related lawsuits through a $10 billion settlement. The judge, Christopher Lopez, ruled that the proposed settlement did not adequately address the concerns of the plaintiffs and failed to provide sufficient legal protections for those affected by the company's products.

This decision marks the third time that Johnson & Johnson's bankruptcy strategy has been thwarted in court. The company had previously attempted to use bankruptcy proceedings to establish a trust fund for victims of its talc products, which have been linked to ovarian cancer. However, the judge's ruling indicates that the company's efforts to avoid liability through bankruptcy are unlikely to succeed.

In response to the ruling, Johnson & Johnson stated that it would not appeal the decision but would instead return to the tort system to defend against the allegations. The company's legal team has indicated that they will continue to fight the claims in court, asserting that the allegations are unfounded.

This development is likely to have significant implications for Johnson & Johnson's legal and financial outlook, as the company faces ongoing litigation and potential damages from the talc-related lawsuits. The rejection of the settlement highlights the challenges that the company faces in resolving these claims and the potential impact on its stock price and market position.