U.S. Lawmakers Introduce Bipartisan Bill to Curb Corporate Bankruptcy Loopholes Amid Johnson & Johnson Controversy
Washington, D.C. — A new bipartisan bill is gaining traction in Congress, aimed at addressing a controversial bankruptcy strategy that has been employed by major corporations like Johnson & Johnson. This legal maneuver, known as the “Texas Two-Step,” allows companies to create separate entities to absorb liabilities, particularly those stemming from mass tort litigation, essentially shielding the main corporation from significant financial consequences. The legislative push seeks to overhaul aspects of the U.S. bankruptcy code that currently permit such divisions, a tactic that critics argue undermines the rights of litigants by limiting their ability to … Read more