On Tuesday, January 30th, a U.S. appeals court rejected Johnson & Johnson’s bankruptcy strategy for tens of thousands of talc-related lawsuits. The ruling from the U.S. Court of Appeals for the Third Circuit in Philadelphia determined that the company’s strategy of using Chapter 11 bankruptcy protection to resolve the lawsuits was not valid.

The ruling came after Johnson & Johnson had announced their plan to create a $4.7 billion trust fund to pay for the lawsuits in October of 2020. The company had argued that the trust fund would provide a fairer resolution for all parties involved.

However, the court disagreed and ruled that the company was using the bankruptcy protection to avoid liability. The ruling will now allow the thousands of talc-related lawsuits to proceed in court.

The news of the ruling caused Johnson & Johnson’s stock to fall on Tuesday, while General Electric Healthcare (GEHC) saw its stock rise following strong earnings. Shares of the healthcare conglomerate climbed 4.6%. Meanwhile, shares of the consumer products giant, Procter & Gamble (PHG), also rose following positive news.

The ruling is a major blow to Johnson & Johnson and its efforts to resolve the talc-related lawsuits. It is unclear how the company will move forward in resolving the thousands of cases.