A Johnson & Johnson company cannot delay a court order dismissing its bankruptcy, a U.S. court said on Friday, despite the company's planned Supreme Court appeal to use bankruptcy to resolve tens of thousands of lawsuits over its talc products, Reuters reported. J&J sought to use the bankruptcy of its subsidiary company, LTL Management, to halt more than 38,000 lawsuits alleging the company's Baby Powder and other talc products are contaminated with asbestos. J&J maintains its consumer talc products are safe and asbestos-free. The bankruptcy strategy stumbled in January, when the Third U.S. Circuit Court of Appeals based in Philadelphia ruled that neither LTL nor J&J had a legitimate need for bankruptcy protection because they were not in "financial distress." LTL asked the Third Circuit to delay its ruling from taking effect and give the company time to pursue a U.S. Supreme Court appeal. The Third Circuit denied that request in a brief written order on Friday, instead directing a U.S. bankruptcy judge to dismiss LTL's chapter 11 case. LTL has not yet filed a formal petition to the U.S. Supreme Court. The judge overseeing LTL's bankruptcy case, U.S. Bankruptcy Judge Michael Kaplan in Trenton, N.J., said in February that he was prepared to end the bankruptcy and allow talc lawsuits to resume once the Third Circuit issued a formal mandate of its January decision, which it has now done. LTL's bankruptcy put a deluge of talc litigation on hold, including the approximately 38,000 cases that are consolidated in a New Jersey federal court proceeding.
