June 27 Reuters Johnson Johnson39;s proposed 8.9 billion settlement of thousands of lawsuits alleging that its talc products cause cancer faces a crucial hurdle this week as a U.S. bankruptcy judge in New Jersey considers whether or not a JJ subsidiary may resolve them by filing for bankruptcy a second time.

JJ subsidiary LTL Management39;s first attempt to do that was dismissed in April after a U.S. appeals court ruled that it was not in sufficient financial distress to be eligible for bankruptcy protection.

LTL quickly filed for bankruptcy again, arguing that its second effort has won more support from plaintiffs for a comprehensive settlement of current and future lawsuits alleging that JJ39;s baby powder and other talc products sometimes contained asbestos and caused mesothelioma, ovarian and other cancers. JJ has said its talc products are safe and do not contain asbestos.

Attorneys representing cancer victims, along with the U.S. Justice Department39;s bankruptcy watchdog, have called for LTL39;s second bankruptcy to be dismissed as an abuse of U.S. bankruptcy law. Cancer victims who oppose the bankruptcy settlement have said that the second bankruptcy recycles a failed legal strategy to keep their cases from being heard by juries.

Starting on Tuesday, U.S. Bankruptcy Judge Michael Kaplan in Trenton is due to hear several days of evidence and arguments before making a ruling. Kaplan, whose decision in support of LTL39;s first bankruptcy filing was overturned by…