{"id":13136,"date":"2023-03-28T16:54:47","date_gmt":"2023-03-28T22:54:47","guid":{"rendered":"https:\/\/www.asbestosclaims.law\/?post_type=blog&p=13136"},"modified":"2023-03-29T18:16:20","modified_gmt":"2023-03-30T00:16:20","slug":"what-is-the-texas-two-step","status":"publish","type":"blog","link":"https:\/\/www.asbestosclaims.law\/es\/asbestos-blog\/que-es-el-texas-two-step\/","title":{"rendered":"What is the Texas Two-Step?"},"content":{"rendered":"\n

Short answer: <\/strong><\/strong>It\u2019s not<\/strong><\/em> a dance move. Rather, it\u2019s a (somewhat controversial) bankruptcy procedure gaining popularity among corporations looking to navigate their debt.  <\/p>\n\n\n\n

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If you may have been exposed to asbestos, speak with your healthcare provider about tests and screening to help detect the presence of asbestos fibers and <\/strong>asbestos-related diseases<\/strong><\/a>.<\/strong><\/p>\n<\/div>\n<\/div>\n\n\n\n
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Understanding the Texas Two-Step Bankruptcy Maneuver<\/h2>\n<\/div>\n\n\n\n
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Legal procedure has allowed companies like asbestos manufacturers to escape liability for injuries their products cause.<\/h3>\n\n\n\n
While there are federal regulations and laws in place for both individuals and corporations to file for bankruptcy, it is also true that states have their own sets of bankruptcy laws.  States like Texas and Delaware have some bankruptcy laws in place that appeal to corporations for different reasons.  <\/p>\n\n\n\n
And over the years, Texas has become a popular state for some major corporations looking to offload debt and liability thanks to something called a divisive merger<\/em>, or the \u201cTexas two-step.\u201d<\/p>\n\n\n\n
What is a corporate merger and how does it impact the Texas Two-Step?<\/h3>\n\n\n\n
But let\u2019s back up.  First, what is a merger?  The U.S. Small Business Administration defines it as the combining of \u201ctwo separate businesses into a single new legal entity.<\/a>\u201d  So, Company A and Company B agree to join forces (merge) and become Company C.  <\/p>\n\n\n\n
This differs from an acquisition, which is when one company purchases another that becomes absorbed into the original (parent) company (Company A buys Company B, and Company B becomes part of Company A).  <\/p>\n\n\n\n
A divisive (or divisional) merger, which is involved in the Texas two-step, is when one company divides itself into multiple entities.  Essentially, a company can create a smaller company (or companies) that may take on certain aspects, departments, and\/or finances of the original.<\/p>\n\n\n\n
In fact, this practice was first introduced into Texas law in 1989.  Authors who wrote it, members of the Corporation Law Committee of the Texas State Bar, wanted it to create a more flexible business environment in Texas<\/a>, and did not intend<\/strong> for it to be used by billion dollar corporations to insulate themselves from claims and avoid paying them out.  <\/p>\n\n\n\n
It\u2019s a totally legal move, but its use by big corporations has been making waves in the world of not only bankruptcy law, but asbestos litigation as well. <\/h3>\n\n\n\n
You may be familiar with Johnson & Johnson (J&J), a company known for making a wide array of beauty care products and notably, baby products.  Maybe you\u2019ve even heard about the swarm of lawsuits filed against them in recent years on behalf of women, and some men and other family members, who have been diagnosed with various cancers from exposure to asbestos found in Johnson & Johnson\u2019s talcum based baby powder. <\/p>\n\n\n\n
This has resulted in a massive class action suit against the company as well as hundreds, if not thousands, of other asbestos injury claims.  <\/p>\n\n\n\n
How can asbestos get into talc? <\/strong>

<\/strong>Basically, through cross contamination since both are naturally occurring minerals. Talc is a type of clay silicate mineral. Much like the tremolite asbestos<\/a> that was found among the vermiculite in the mine formerly operated by W.R. Grace<\/a> in Libby, MT<\/a>, asbestos can also be found among deposits of talc.  
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J&J\u2019s Two-Step<\/h2>\n<\/div>\n\n\n\n
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In 2021, J&J created a Texas based subsidiary company called LTL Management, LLC by way of the Texas Two-Step.  Then, it took the 40,000+ asbestos injury claims it\u2019s facing and offloaded them onto LTL, effectively stalling all of those cases in court.  But that\u2019s not all.<\/p>\n\n\n\n
Shortly after LTL Management was created (read: less than a week), it filed for Chapter 11 bankruptcy.  If you\u2019re not familiar with that term or need a refresher, Chapter 11 refers to the \u201cchapter\u201d of the U.S. Bankruptcy Code that \u201cgenerally provides for reorganization, usually involving a corporation or partnership<\/a>.\u201d  Usually, this is done so that the corporation (or less often, individual) can \u201ckeep its business alive and pay creditors over time.\u201d<\/p>\n\n\n\n
Texas Two-Step can let debtors avoid paying creditors (including injured customers)<\/h3>\n\n\n\n
Part of the complex bankruptcy process involves the debtor, the company or person filing for bankruptcy, submitting financial records and a plan of reorganization to the court.  In 2022, J&J\u2019s filing was allowed to move forward after a judge\u2019s ruling.<\/p>\n\n\n\n
But most recently, per Bloomberg Law,<\/a> judges from the US Court of Appeals Third Circuit ruled that LTL Management could not actually file for bankruptcy because it is being funded with $61.5 billion by J&J, according to court submissions.  Basically, the company was found to be too financially secure to declare bankruptcy.<\/p>\n\n\n\n
Johnson & Johnson\u2019s position on the Texas Two-Step<\/h3>\n\n\n\n
J&J said that the purpose of LTL filing for Chapter 11 was \u201cto resolve all claims related to cosmetic talc in a manner that is equitable to all parties, including any current and future claimants\u201d<\/a> which sounds like the plan was to establish a bankruptcy trust<\/a>.  <\/p>\n\n\n\n
This ruling has the potential to derail J&J\/LTL\u2019s plans, and also to change the game around procedural moves like the Texas two-step.\u00a0 Because actually, J&J is far from the first company to attempt the move in regards to resolving asbestos litigation.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n
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Do You Qualify For Compensation?<\/p>\n        
Quickly and easily find out how you were exposed by searching W.A.R.D., the largest asbestos database on the planet.<\/p>\n        FREE SEARCH > <\/a>\n    <\/div>\n\n\n\n
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Other asbestos companies have used the Texas two-step to establish bankruptcy trusts instead of facing mounting asbestos litigation claims.<\/h3>\n\n\n\n
Another company that has taken this route is former producer of asbestos joint compound Georgia-Pacific<\/a> (parent company Koch Industries), which two-stepped into creating Bestwall in 2017 and assigned all GP\u2019s asbestos liability to it.  If you guessed that Bestwall\u2019s next step was to file for Chapter 11, you guessed right.<\/p>\n\n\n\n
A few years later, asbestos cement and coating manufacturer CertainTeed Corporation (parent company Saint-Gobain) spun off its asbestos liabilities to a subsidiary called DBMP, LLC, which then filed for Chapter 11 bankruptcy.  <\/p>\n\n\n\n
And still another company, Trane Technologies, two-stepped into creating 2 new entities to take on the burden of its asbestos litigation debt \u2013 Aldrich Pump, LLC and Murray Boiler, LLC.  Trane manufactured industrial equipment like pumps and boilers that used asbestos insulation and gasket products in order to function optimally.  Aldrich Pump and Murray Boiler filed for bankruptcy in 2020.  <\/p>\n\n\n\n
When companies use this maneuver, they halt the proceedings of the cases filed in court on behalf of thousands of sick plaintiff\u2019s and their families.  With the recent ruling in the J&J case, we will have to wait and see what the future holds for former asbestos companies eyeing the Texas two-step.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n
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AsbestosClaims.Law<\/h2>\n<\/div>\n\n\n\n
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For Justinian C. Lane, getting compensation for asbestos victims is personal.<\/h3>\n\n\n\n
Justinian’s grandparents and his father all worked with asbestos in their younger years and died from asbestos-related cancers in their later years.  <\/p>\n\n\n\n
At the time of each of their deaths, no one in Justinian’s family knew that they were eligible to file an asbestos lawsuit and to seek compensation from the asbestos trusts.<\/strong><\/p>\n\n\n\n
Because no one in Justinian’s family knew their options, they never received any compensation for the death of their loved ones. <\/p>\n\n\n\n
If you believe that you or your family member\u2019s injury was related to asbestos exposure, you could be entitled to significant compensation<\/a>.<\/h3>\n\n\n\n
This is money you could use to cover the costs of asbestos removal services, pay for medical treatment, and preemptively protect your physical well-being. <\/h4>\n\n\n\n
There are also asbestos trusts that offer compensation much more quickly and easily (without filing a lawsuit.)<\/h3>\n\n\n\n
If you\u2019d like help with filing a claim, please get in touch<\/a> by email at help@asbestosclaims.law<\/a>, or call or text us at (833) 4-ASBESTOS (427-2378)<\/a> or (206) 455-9190<\/a>. We\u2019ll listen to your story and explain your options. And we never charge for anything unless you receive money in your pocket.<\/p>\n\n\n\n
In addition to legal claims<\/a>, veterans disability<\/a>, social security<\/a> and employment protection like workers compensation<\/a>, FELA<\/a> and The Jones Act<\/a> for maritime workers, there are asbestos trusts<\/a> that have been set up to compensate those harmed by asbestos without having to file a lawsuit.<\/p>\n\n\n\n
There is no risk or cost to speak with one of our staff about your asbestos litigation. There are no fees unless you receive money.<\/h3>\n\n\n\n
If you have any additional questions or concerns related to asbestos, check out our website<\/a> and YouTube page<\/a> for videos, infographics and answers to your questions about asbestos, including health and safety<\/a>, asbestos testing<\/a>, removing asbestos from your home and building<\/a>, and legal information<\/a> about compensation for asbestos injuries<\/a>.<\/p>\n\n\n\n
Introducing the largest database of asbestos information on the planet.<\/h3>\n\n\n\n
W.A.R.D<\/a>., which stands for the Worldwide Asbestos Research Database, helps clients to narrow down when and where they may have been exposed, as well as which products may still contain asbestos. W.A.R.D. will also help indicate compensation types and how much a person may be entitled to.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"featured_media":13138,"template":"","blogtag":[81],"class_list":["post-13136","blog","type-blog","status-publish","has-post-thumbnail","hentry","blogtag-asbestos-law"],"acf":[],"x_featured_media":"https:\/\/www.asbestosclaims.law\/wp-content\/uploads\/2023\/03\/Header-Asbestos-texas-pano-mobile-220x220.jpg","x_featured_media_medium":"https:\/\/www.asbestosclaims.law\/wp-content\/uploads\/2023\/03\/Header-Asbestos-texas-pano-mobile.jpg","x_featured_media_large":"https:\/\/www.asbestosclaims.law\/wp-content\/uploads\/2023\/03\/Header-Asbestos-texas-pano-mobile.jpg","x_featured_media_original":"https:\/\/www.asbestosclaims.law\/wp-content\/uploads\/2023\/03\/Header-Asbestos-texas-pano-mobile.jpg","x_date":"marzo 28, 2023","x_metadata":{"image_header_blog":"13137","_image_header_blog":"field_5f86255998692","name_author":"AsbestosClaims.Law Staff","_name_author":"field_5fa027bb365d8","image_author":"6020","_image_author":"field_5fa02869365d9","alternative_link":"","_alternative_link":"field_5faae1f7dd7d1","title_location":"Asbestos Lawyer:","_title_location":"field_63dad6e7d72c9","name_location":"","_name_location":"field_63347737c6caa","image_location":"","_image_location":"field_6334775ac6cab","_yoast_wpseo_focuskeywords":"[]","_yoast_wpseo_keywordsynonyms":"[\"\"]","_yoast_wpseo_estimated_reading_time_minutes":"","_yoast_wpseo_wordproof_timestamp":"","_thumbnail_id":"13138","_yoast_indexnow_last_ping":"1680135381","_trp_translated_slug_es_ES":"que-es-el-texas-two-step"},"_links":{"self":[{"href":"https:\/\/www.asbestosclaims.law\/es\/wp-json\/wp\/v2\/blog\/13136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asbestosclaims.law\/es\/wp-json\/wp\/v2\/blog"}],"about":[{"href":"https:\/\/www.asbestosclaims.law\/es\/wp-json\/wp\/v2\/types\/blog"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.asbestosclaims.law\/es\/wp-json\/wp\/v2\/media\/13138"}],"wp:attachment":[{"href":"https:\/\/www.asbestosclaims.law\/es\/wp-json\/wp\/v2\/media?parent=13136"}],"wp:term":[{"taxonomy":"blogtag","embeddable":true,"href":"https:\/\/www.asbestosclaims.law\/es\/wp-json\/wp\/v2\/blogtag?post=13136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}