Under a proposal, a J&J subsidiary will re-file for bankruptcy protection and seek court approval for a plan that would result in one of the largest product-liability settlements in U.S. history.

A federal judge has allowed a Johnson & Johnson spinoff to proceed with a controversial bankruptcy, despite complaints from thousands who say they were harmed by the company's baby powder.

Johnson & Johnson spun off liabilities — including roughly 38,000 lawsuits — linked to claims of asbestos contamination in its baby powder to a new firm, which then declared bankruptcy.

The complaint claims the New Jersey-based company made Black women a "central part" of its business strategy but failed to warn them about the potential dangers of the powder products it was selling.