AIRROC featured a session on the controversial Texas Two Step Bankruptcy maneuver in July of 2022. In January the Third Circuit's Court of Appeals ruling to create a new standard for “financial distress” that could potentially change a company’s ability to use this strategy. In carrying out a Texas Two Step Bankruptcy, a company first creates a new legal entity into which it transfers any tort liabilities, while transferring a relatively small portion of the original company’s assets and then the newly created corporation then files for bankruptcy. Our panel will provide an update on this important case, discuss how it works, the Texas statutes that companies are relying on, and discuss implications for insurers.

Panelists:
John Cruciani, Partner, Husch Blackwell
Scott Davis, Partner, Husch Blackwell