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- Title
THE TEXAS TWO-STEP--IT'S NOT DEAD YET.
- Authors
Casarino, Marc; Calhoun, George
- Abstract
Although the LTL decision has placed a considerable roadblock before LTL, the fundamental structure of a Texas two-step remains viable for the right companies or where a funding agreement more closely aligns with the actual liability faced. The Texas Two-Step The Texas two-step bankruptcy strategy enables a corporate debtor to "merge" into two companies: one that will continue to hold operational assets and the other that will hold the targeted liabilities and specified fixed assets. This enables a company to streamline the bankruptcy process by keeping operating assets out of bankruptcy but still enabling the company to access the unique bankruptcy powers to resolve mass tort liabilities. For the past several years, a series of debtors have used a controversial new bankruptcy strategy known as the "Texas two-step" to streamline the bankruptcy process in mass tort cases by insulating operating businesses from bankruptcy oversight while simultaneously taking advantage of bankruptcy trust and injunctive powers to distribute funds among claimants.
- Subjects
DEBTOR &; creditor; BUSINESS enterprises; CONTRACTS; FRAUDULENT conveyances; BUSINESS planning; BANKRUPTCY; BANKRUPTCY claims; PERSONAL bankruptcy; BANKRUPTCY courts
- Publication
Brief, 2023, Vol 52, Issue 2, p58
- ISSN
0273-0995
- Publication type
Article