Three J&J Talc Bankruptcies Failed in 31 Months. The 67,000 Cases Now Going to Trial.

Three federal courts have now rejected Johnson & Johnson’s Texas Two-Step talc bankruptcy strategy in 31 months, and the dismissal of Red River Talc LLC on March 31, 2025 sends approximately 67,000 pending cases in MDL 2738 back to the trial pipeline. U.S. Bankruptcy Judge Christopher M. Lopez denied confirmation of the prepackaged plan that would have funded a $9 billion trust to resolve current and future ovarian cancer talc claims.

The pattern is now clear. Each filing failed for substantively similar reasons. The debtor entity lacked genuine financial distress. The plan structure attempted to extend bankruptcy protections to non-debtor parent and affiliate companies. The Supreme Court’s June 2024 decision in Harrington v. Purdue Pharma further narrowed the legal space for the third-party releases that were a structural feature of all three filings. The bankruptcy door has closed. The trial calendar is now the path.

For people with mesothelioma and for ovarian cancer claimants whose cases were paused for years through three bankruptcy attempts, the dismissal returns those cases to active litigation. Mesothelioma has no cure and an average survival of 12 to 21 months from diagnosis. The procedural delay has real consequences for the people whose claims this strategy was designed to channel.

The Three Filings

The first filing came in October 2021. J&J used Texas’s divisive merger statute to split its consumer-products subsidiary into two entities. The new entity, LTL Management LLC, absorbed all current and future talc liabilities. LTL Management filed Chapter 11 in the Western District of North Carolina, where the case was promptly transferred to the District of New Jersey. The Third Circuit Court of Appeals dismissed it on January 30, 2023 in Case No. 22-2003, holding that good faith under 11 U.S.C. Section 1112(b) requires actual financial distress, which a newly created liability-only subsidiary cannot show.

The second filing came on April 4, 2023. J&J refiled LTL Management Chapter 11 in the District of New Jersey, this time with a larger settlement structure. The bankruptcy court dismissed it again in July 2023, and the Third Circuit affirmed the dismissal on June 25, 2024. Same reasoning, same outcome.

The third filing took the case south. Red River Talc LLC, also a J&J-created entity holding only talc liabilities, filed Chapter 11 on September 20, 2024 in the U.S. Bankruptcy Court for the Southern District of Texas as Case No. 24-90505. The Houston filing chose a different circuit and a court with a heavily-trafficked complex bankruptcy bar. The legal architecture differed in details but rested on the same structural premise: a liability-only debtor proposing a plan that would extinguish current and future claims against non-debtor parents and affiliates through a court-ordered trust.

The Lopez Ruling

Judge Christopher M. Lopez issued his memorandum decision and order on March 31, 2025. The opinion identified three principal grounds for dismissal under 11 U.S.C. Section 1112(b)(1).

The first was voting. A prepackaged Chapter 11 plan requires solicitation of votes from impaired creditors before the petition is filed. The court found that prepetition votes cast by plaintiff law firms on behalf of clients had been collected in ways that meant the votes could not be certified. Plaintiff firms had voted for tens of thousands of clients without direct contact or specific authorization, and in some cases without sufficient information about the plan terms.

The second was good faith. The Supreme Court’s 2024 Purdue Pharma decision had already established the framework. Red River Talc was a non-operating shell with no employees, no plant, no operations of its own. The Third Circuit’s reasoning from the LTL Management dismissals applied directly: a liability-only entity cannot establish the kind of financial distress that supports a good-faith Chapter 11 filing.

The third was the third-party release structure. The plan would have channeled current and future ovarian cancer claims against J&J and affiliated non-debtor entities into the trust, releasing those entities from further liability. The Supreme Court in Harrington v. Purdue Pharma had ruled in June 2024 that the Bankruptcy Code does not authorize nonconsensual third-party releases absent explicit statutory authority. Judge Lopez applied that framework directly.

What J&J Said It Will Do Next

The same day as the dismissal, Johnson & Johnson issued a statement through Erik Haas, the company’s Worldwide Vice President of Litigation. The statement was unambiguous. Rather than appeal, J&J would return to the tort system to litigate cases on the merits. The company cited a record of 16 wins in 17 ovarian cancer cases tried over the prior 11 years and announced it would reverse approximately $7 billion previously reserved for the bankruptcy resolution.

The strategic implication is significant. The bankruptcy approach had aimed to resolve all current and future claims through a single judicially-administered trust. The trial-system approach resolves cases one at a time, in dozens of state and federal courts, against thousands of individual claimants. J&J argues the math favors them because of the trial-win record. Plaintiffs argue the underlying Texas Two-Step strategy was always structurally improper, and the trial calendar will now demonstrate the strength of the underlying claims.

For context, J&J trial outcomes have varied widely. Multi-billion-dollar verdicts have been returned against the company. The $15.6 billion Cherie Craft mesothelioma verdict in 2025 is the largest single talc verdict on record, though much of that was punitive damages subject to constitutional caps on appeal.

The MDL 2738 Pipeline

MDL 2738 (In re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices, and Products Liability Litigation) is pending in the U.S. District Court for the District of New Jersey before U.S. District Judge Michael A. Shipp. The MDL consolidates federal-court talc cases for pretrial proceedings, including bellwether trials that test the theories and damages frameworks before remand to home districts.

As of early 2026, multiple litigation trackers report the MDL holding approximately 67,000 to 67,623 pending cases. Growth slowed during the Red River bankruptcy stay because new filings had been chilled by the prospect of channeled resolution. After the dismissal, the trackers report a renewed influx as plaintiffs who had held cases in state-court venues moved them to the MDL. The pace and the venue distribution will depend in part on how state-court counterparts in Madison County, Illinois and other plaintiff-favored venues choose to handle their parallel dockets.

Three Strikes and the Strategic Lesson

The takeaway from three failed filings is structural, not procedural. The Texas Two-Step in its J&J implementation rested on two assumptions. The first was that bankruptcy courts would accept that a newly-created liability-only entity could file Chapter 11 in good faith. The Third Circuit’s 2023 LTL Management opinion rejected that. The second was that bankruptcy courts could grant nonconsensual third-party releases extinguishing parent and affiliate liability. The Supreme Court’s 2024 Purdue Pharma decision rejected that.

Both pillars are now gone. Future asbestos and talc defendants exploring bankruptcy as a liability-resolution path face a substantially narrower legal corridor. The Vanderbilt Minerals Chapter 11 filing in February 2026 (a separate industrial talc bankruptcy in the Northern District of New York) tests a different model, with an operating debtor and a Section 524(g) trust process intended to handle asbestos liability through statutorily-authorized channels rather than nonconsensual releases. That case will be the next test of where the bankruptcy path remains viable for asbestos defendants.

For people who have filed talc claims, the procedural framing is now clear. The cases will be tried in the MDL and in state courts. The settlement structure that the Red River plan would have imposed is gone. The next 24 months of bellwether outcomes in MDL 2738 will substantially shape the size and pace of any future global resolution.