Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistFeaturesBankruptcyLitigation

Courts and Plaintiffs Lawyers Question Viability of 'Texas Two-Step'

By Christine Schiffner
May 01, 2023

As defendants increasingly seek bankruptcy as a resolution to multidistrict litigation claims, plaintiffs firms and judges are starting to ask questions about the legitimacy of the tool commonly referred to as the "Texas Two-Step."

Plaintiffs lawyers have called the use of bankruptcy as a strategy in multidistrict litigation "blatantly disgusting," and litigation funders during a recent conversation said they view it dispassionately as a "settlement tool."

"What defendants want is to resolve all the claims with as little chance as possible of new claims coming back to them," Stanford Law professor Deborah Hensler told the National Law Journal. Hensler, who teaches complex litigation, mass tort and class action, added that the defense side wants to prevent "thousands of new claimants coming against them forever." The real issue, however, is the question of the appropriateness of using bankruptcy as a resolution model for mass tort litigation. "What are the limits? I think those are still being worked out."

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
How Secure Is the AI System Your Law Firm Is Using? Image

In a profession where confidentiality is paramount, failing to address AI security concerns could have disastrous consequences. It is vital that law firms and those in related industries ask the right questions about AI security to protect their clients and their reputation.

COVID-19 and Lease Negotiations: Early Termination Provisions Image

During the COVID-19 pandemic, some tenants were able to negotiate termination agreements with their landlords. But even though a landlord may agree to terminate a lease to regain control of a defaulting tenant's space without costly and lengthy litigation, typically a defaulting tenant that otherwise has no contractual right to terminate its lease will be in a much weaker bargaining position with respect to the conditions for termination.

Pleading Importation: ITC Decisions Highlight Need for Adequate Evidentiary Support Image

The International Trade Commission is empowered to block the importation into the United States of products that infringe U.S. intellectual property rights, In the past, the ITC generally instituted investigations without questioning the importation allegations in the complaint, however in several recent cases, the ITC declined to institute an investigation as to certain proposed respondents due to inadequate pleading of importation.

The Power of Your Inner Circle: Turning Friends and Social Contacts Into Business Allies Image

Practical strategies to explore doing business with friends and social contacts in a way that respects relationships and maximizes opportunities.

Authentic Communications Today Increase Success for Value-Driven Clients Image

As the relationship between in-house and outside counsel continues to evolve, lawyers must continue to foster a client-first mindset, offer business-focused solutions, and embrace technology that helps deliver work faster and more efficiently.