This chapter examines the concept of a Texas Two-Step bankruptcy and its implications for indemnification obligations. It discusses a recent hearing and decision by Judge Silverstein regarding a motion to prevent Johnson & Johnson from avoiding indemnification through restructuring. The chapter also explores the potential loophole in bankruptcy law and the challenges of enforcing funding agreements for liability transfers.
On this week’s podcast the Americas Core Credit team discusses Texas two-step bankruptcies and how the liability management maneuver could be deployed in Johnson & Johnson and Imerys Talc.
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