The 'Texas two-step': A controversial legal strategy to avoid corporate liability

On Point with Meghna Chakrabarti

WBUR

Talk Show, News, Npr, Daily, On Point

4.3 • 3.9K Ratings

🗓️ 20 October 2022

⏱️ 50 minutes

🔗️ Recording | iTunes | RSS

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Summary

Corporations facing massive litigation are using a new legal strategy to avoid liability. It’s known as the Texas two-step. Step one: create a subsidiary and transfer a few assets and all the lawsuits. Step two: The subsidiary files for bankruptcy. Rob Rasmussen, Mike Spector and Leigh O'Dell join Kimberly Atkins Stohr.

Transcript

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0:00.0	Support for this podcast comes from Geico.
0:02.8	How would you love a chance to save some money on car insurance?
0:06.4	Geico can help.
0:07.6	Switch today and see all the ways you could save
0:10.1	with great rates and discounts.
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0:12.9	Simply go to geico.com to get a rate quote
0:15.8	and get started seeing how much you could save.
0:22.5	I'm Kimberly Atkins-Store,
0:24.0	in from Magna Chakrabardi.
0:25.7	And this is on point.
0:27.6	Today, we're talking about a controversial legal strategy
0:31.4	known as the Texas Two Step, or a Texas divisive merger.
0:35.7	It's a tool that corporations facing massive litigation
0:39.1	have used recently to avoid liability.
0:42.1	Corporations such as Koch Industries, Georgia Pacific,
0:46.2	to Johnson and Johnson.
0:48.4	Last February, the Senate Judiciary Committee held a hearing
0:51.6	to examine this process.
0:53.1	Democratic Senator Sheldon Whitehouse of Rhode Island
0:55.8	led the hearing.
0:57.0	So far, this trick has hit as best of victims.
	...

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