4 ms·

It is a pretty well-documented strategy that has been done several times: https://en.m.wikipedia.org/wiki/Texas_two-step_bankruptcy https://en.m.wikipedia.org/w

It is a pretty well-documented strategy that has been done several times: https://en.m.wikipedia.org/wiki/Texas_two-step_bankruptcy https://en.m.wikipedia.org/wiki/Texas_two-step_bankruptcy Not sure why you are treating it as an absurd concept.

thfuran 3y ago
It is an absurd concept, but that unfortunately doesn't mean it's implausible.
HDThoreaun 3y ago
The texas two step is not used to skirt liabilities. Its point is to consolidate all the cases in one court to reduce lawyer headaches and ensure each claimant is paid fairly.
- shkkmo 3y ago
  It absolutely is used to reduce payouts. The fact that it limits the potential for very large punitive jury judgments is an argument made by supporters of the texas two step. It's basically a way of forcing everyone suing you into something akin to a class action, but one where you lose most of the legal rights you would have in a class actions.
- FireBeyond 3y ago
  No, it's absolutely and really not. Here... Is this strategy called the Texas Two-Step because: 1) it assists claimants and plaintiffs (your adversaries) to bond together and present one solid unified case against you, or... 2) because it assists you to elegantly dance around your liabilities?
  - somenits 3y ago
    You know you've lost the argument when your only response to actual facts and analysis is "yeah but what does this name sound like".
    - skeaker 3y ago
      No, GP makes a fair point. If it were true that all this does is benefit claimants and plaintiffs, the adversaries of the one taking the action, why would they do it?
      - somenits 3y ago
        Of course it would benefit J&J too. You get to consolidate your cases in one court. You get to be in federal court, which is by conventional wisdom believed to be more defendant-friendly. You get to achieve legal certainty in a shorter period of time. It also benefits all the plaintiffs who weren't early to the party, since they are guaranteed a slice of the pie (if they win), instead of the first few successful plaintiffs eating the whole thing.
        FireBeyond 3y ago
        > It also benefits all the plaintiffs who weren't early to the party, since they are guaranteed a slice of the pie (if they win), instead of the first few successful plaintiffs eating the whole thing. The pie is much smaller though. Georgia Pacific was faced with 62,000+ claims. They went through this same process. Spun off their subsidiary. "Pledged" to fund it with an "initial" billion dollars, and that GP would fund all claims. Never happened. They actually only funded $175M. Less than $3,000 per claimant for asbestos related injuries. Less than $3,000 before legal fees. And there was nothing defendants could do, because there was no legal obligation that could be created to force GP to fully fund. "That entity is independent and is in bankruptcy. So sad, too bad."
        somenits 3y ago
        Please see my comment here https://news.ycombinator.com/item?id=36794762 https://news.ycombinator.com/item?id=36794762

thfuran 3y ago

It is an absurd concept, but that unfortunately doesn't mean it's implausible.

HDThoreaun 3y ago

The texas two step is not used to skirt liabilities. Its point is to consolidate all the cases in one court to reduce lawyer headaches and ensure each claimant is paid fairly.

shkkmo 3y ago
It absolutely is used to reduce payouts. The fact that it limits the potential for very large punitive jury judgments is an argument made by supporters of the texas two step. It's basically a way of forcing everyone suing you into something akin to a class action, but one where you lose most of the legal rights you would have in a class actions.
FireBeyond 3y ago
No, it's absolutely and really not. Here... Is this strategy called the Texas Two-Step because: 1) it assists claimants and plaintiffs (your adversaries) to bond together and present one solid unified case against you, or... 2) because it assists you to elegantly dance around your liabilities?
- somenits 3y ago
  You know you've lost the argument when your only response to actual facts and analysis is "yeah but what does this name sound like".
  - skeaker 3y ago
    No, GP makes a fair point. If it were true that all this does is benefit claimants and plaintiffs, the adversaries of the one taking the action, why would they do it?
    - somenits 3y ago
      Of course it would benefit J&J too. You get to consolidate your cases in one court. You get to be in federal court, which is by conventional wisdom believed to be more defendant-friendly. You get to achieve legal certainty in a shorter period of time. It also benefits all the plaintiffs who weren't early to the party, since they are guaranteed a slice of the pie (if they win), instead of the first few successful plaintiffs eating the whole thing.
      - FireBeyond 3y ago
        > It also benefits all the plaintiffs who weren't early to the party, since they are guaranteed a slice of the pie (if they win), instead of the first few successful plaintiffs eating the whole thing. The pie is much smaller though. Georgia Pacific was faced with 62,000+ claims. They went through this same process. Spun off their subsidiary. "Pledged" to fund it with an "initial" billion dollars, and that GP would fund all claims. Never happened. They actually only funded $175M. Less than $3,000 per claimant for asbestos related injuries. Less than $3,000 before legal fees. And there was nothing defendants could do, because there was no legal obligation that could be created to force GP to fully fund. "That entity is independent and is in bankruptcy. So sad, too bad."
        somenits 3y ago
        Please see my comment here https://news.ycombinator.com/item?id=36794762 https://news.ycombinator.com/item?id=36794762