Law Commons^™

Show Me The Money: How Bankruptcy Courts Could Become The Most Equitable Mass Tort Forum, Olivia Maier

Washington and Lee Journal of Civil Rights and Social Justice

The Texas Two-Step has emerged as a dangerous bankruptcy maneuver for companies to defend against mass tort liability. The process allows a company to allocate all of its tort liability to a newly created company which then files for bankruptcy. The Bankruptcy Code provides instantaneous benefits for that new company, which tort victims are left unable to proceed with their claims. This has resulted in an inequitable process, and outcomes, for those victims as seen by the recent Johnson & Johnson Texas Two-Step. While this process is unjust, it has raised an interesting question: could a bankruptcy court become the …

Texas Two-Stepping Out Of Bankruptcy, Michael A. Francus

Michigan Law Review Online

Johnson & Johnson has a problem. For decades, it sold talc baby powder, a product that made Johnson & Johnson a household name and earned the business billions. But as those babies grew up, they started getting cancer. And then they began suing. Last June, twenty-two plaintiffs cemented a $2.12 billion judgment against Johnson & Johnson for cancer caused by its baby powder. Another 38,000 cases (and counting) remain in progress, each with the potential for a similar verdict.

To handle these mass tort liabilities, Johnson & Johnson has followed the lead of many businesses and turned to the bankruptcy …