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AAJ Reacts to Texas Two-Step Developments

All Eyes on Little-Known Legal Trick: Despite Bipartisan Opposition to TX Two-Step, J&J Thinks 3rd Time’s the Charm

January 25,2024

Washington, DC — The following are statements from American Association for Justice President on recent developments regarding the Texas Two-Step legal trick to escape accountability:

 

BACKGROUND: After two failed attempts to declare bankruptcy in New Jersey, Johnson & Johnson is reportedly planning to attempt the legal trick for a third time, this time trying their luck in Texas. Despite news reports that the company may be moving forward with filing for bankruptcy, the corporation just unveiled its Q4 financial report, stating that its “2023 Fourth Quarter reported sales growth of 7.3% to $21.4 Billion.”

 

AAJ President Sean Domnick made the following statement in reaction to the J&J news:

 

“When it comes to evading accountability, Johnson & Johnson must think the third time's the charm. While they reportedly try every trick in the book, the alleged victims and their families are forced to spend years with their cases frozen in time. Victims are dying while their families’ cases are delayed for years – how much more time will be wasted while Johnson & Johnson keeps playing games?”

 

BACKGROUND: Senate Judiciary Chair Dick Durbin (D-IL), Sen. Sheldon Whitehouse (D-RI) and Sen. Josh Hawley (R-MO) submitted an amicus brief to the United States Supreme Court today opposing corporate attempts to use the Texas Two-Step to abuse the bankruptcy system and avoid accountability. The brief was filed in the case of Bestwall LLC v. Official Committee of Asbestos Claimants, regarding Georgia-Pacific’s efforts to transfer its asbestos-related liabilities to a shell company, “moving” that fake entity to Texas, and then declaring bankruptcy.

AAJ President Sean Domnick had the following reaction to the bipartisan amicus brief:

 

“We applaud Senators Durbin, Whitehouse, and Hawley for their leadership against this kind of abuse of our bankruptcy system. Their amicus brief to the U.S. Supreme Court opposing another corporation’s efforts to escape responsibility by using the Texas Two-Step gimmick provides a critical summary of how victims and their families are suffering while corporations exploit the law.

 

“The message to Johnson & Johnson – and any other corporation looking to evade accountability – should be loud and clear: stop trying to make a ‘mockery of congressional intent,’ as the senators stated, by abusing the bankruptcy system.”

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Carly Moore Sfregola
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