Bipartisan Bill Aims to Deter ‘Texas Two-Step’ Bankruptcy Tactic

Members of Congress are targeting the corporate bankruptcy maneuver known as the “Texas Two-Step” with a bipartisan bill to water down the controversial legal strategy.

The Ending Corporate Bankruptcy Abuse Act is aimed at deterring the Two-Step, which several major companies, including Johnson & Johnson, have attempted by placing an affiliate into bankruptcy to resolve mass liability. A bipartisan group of senators and representatives said the tactic allows corporations to evade responsibility for injures they’ve caused and delay justice for consumers.

“Our bipartisan bill would end abuse of the bankruptcy process to ensure that victims get the day in ...