Episode 63: Texas Two-Step Bankruptcy–Corporate Restructuring or Legal Loophole?
The Texas Two-Step is a fairly simple dance, but in the world of corporate bankruptcy, it’s the name of a sophisticated maneuver that some profitable companies employ to stop mass tort liabilities and limit the settlements due to victims. It splits a company and strategically divides its assets and liabilities. In this manner, the companies win and the tort victims, by comparison, lose. But there may be reason for cautious optimism. Proof Over Precedent interviews bankruptcy scholar and law professor Melissa Jacoby about the practice, the reasons courts allow it, and the avenues under consideration for making bankruptcy a more just and exceptional option for corporations.