Show Me the Money: How Bankruptcy Courts Could Become the Most Equitable Mass Tort Forum

Authors

Olivia Maier, Washington and Lee University, School of LawFollow

Abstract

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 best place for these mass tort cases? This Note proposes that yes, bankruptcy courts could become the most equitable mass tort forum through a statutory expansion of 11 U.S.C. § 524(g). 11 U.S.C. § 524(g) was enacted to tackle the asbestos crisis and could be modified to enable an equitable and efficient forum for mass tort victims across industries.

Recommended Citation

Olivia Maier, Show Me the Money: How Bankruptcy Courts Could Become the Most Equitable Mass Tort Forum, 30 Wash. & Lee J. Civ. Rts. & Soc. Just. 195 (2023).
Available at: https://scholarlycommons.law.wlu.edu/crsj/vol30/iss1/8