TwoStep

Unveiling the Texas Two-Step: A Controversial Legal Tactic Used by Major Corporations to Handle Lawsuits

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Austin, Texas — A legal maneuver known as the “Texas Two-Step” has recently come under scrutiny for its role in helping major corporations like Johnson & Johnson and Georgia-Pacific manage their mass tort liabilities through strategic bankruptcy filings. Crafted by the law firm Jones Day, this technique splits a company into two separate entities under Texan law. One of these entities assumes all the mass tort liabilities and then files for bankruptcy, potentially streamlining numerous lawsuits while shielding the parent company’s main assets and operations from related legal claims. This approach allows the financially healthier … Read more

Democratic and Republican Senators Unite to Oppose Controversial Texas Two-Step Legal Tactic

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WASHINGTON (AP) — In a rare show of bipartisan unity, Democratic Senators Dick Durbin and Sheldon Whitehouse, along with their Republican counterpart Josh Hawley, have come together to oppose a legal tactic known as the Texas Two-Step. This maneuver, used by large corporations facing mass tort claims, involves creating a new subsidiary to divert liability and then filing for bankruptcy. The senators have urged the U.S. Supreme Court to overturn a ruling by the U.S. Appeals Court that allowed paper giant Georgia-Pacific to utilize this legal strategy to avoid millions in asbestos liability claims. The … Read more

The Texas Two-Step Bankruptcy Tactic Fails to Provide Desired Relief, Ignites Controversy: A Closer Look

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Austin, Texas – The controversial “Texas Two-Step” bankruptcy cases, which involved corporations using the tactic of restructuring and subsequently filing for bankruptcy to delay mass tort liability, have proven to be unsuccessful. Companies such as Best Wall, DBMP, Aldrich Pump/Murray Boiler, and most recently, LTL, have all attempted this strategy without success. These failed attempts have garnered significant attention, with critics including the U.S. Senate expressing strong opposition. The concept of the Texas Two-Step has muddled the discussion surrounding the legitimate interests of both public companies seeking “finality” in resolving claims and plaintiffs who want … Read more