In late December 2023, U.S. bankruptcy court in North Carolina denied motions to dismiss the Texas Two-Step mass-tort bankruptcy cases of entities created to resolve the asbestos liability of the Trane companies. This type of maneuver involves splitting a company into two, moving the liabilities to one company, and then seek bankruptcy protections to absolve that company of liability. In the opinion (pages 32-39) denying the Trane companies the ability to execute this maneuver, the bankruptcy court extensively cites to and quotes from three of Professors Brubaker’s articles on the subject: (1) “The Texas Two-Step and Mandatory Non-Opt-Out Settlement Powers,” in the Harvard Law School Bankruptcy Roundtable; (2) “Assessing the Legitimacy of the ‘Texas Two-Step’ Mass-Tort Bankruptcy,” in the Bankruptcy Law Letter; and (3) “Mandatory Aggregation of Mass Tort Litigation in Bankruptcy,” in the Yale Law Journal Forum.
