Johnson & Johnson’s Texas Two‑Step: A Bankruptcy Strategy Under Scrutiny
An update to the Johnson & Johnson bankruptcy strategy of a divisive merger, AKA "Texas Two-Step" and a recent (January 2026) New Jersey court dismissal of plaintiff's suit for fraud.
Non-Consensual Third-Party Releases No Longer Permissible in Chapter 11 Plans
In 2024, in a 5-4 decision, the Supreme Court rejected the notion that bankruptcy courts may confirm a plan of reorganization that discharges claims against third parties -- without the consent of affected claimants.
Director Fiduciary Duty and Liability After a Leveraged Buyout
Bill Siegel explains In re nine West LBO Securities Litigation and the proposition that liability may attach to the company’s old board of directors even though they are not members of the new board and were not involved in any of the alleged misconduct.
Settlement Agreements Can Be Held Nondischargeable Debts in Bankruptcy
Prior to filing bankruptcy, a debtor settled an assault claim by agreeing to pay the victim/creditor in installments -- up to a point. Bill Siegel looks at Hilgartner v. Yagi (In re Hilgartner) and whether collection costs and interest are dischargeable
The Insured vs. Insured Exclusion re: Officer and Director Liability
Insurance policy exclusions eliminate coverage for certain acts, property, types of damage, or locations. The Insured vs. Insured Exclusion excludes coverage for claims brought against Directors and Officers by other Directors & Officers for the same company.
Landlords and Administrative Claims in Bankruptcy
Landlords are not always entitled to an Administrative Claim for non-payment of rent in a bankruptcy. When a debtor in bankruptcy rejects a contract...it ends the contractual relationship with the non-debtor counterparty - who is then left with a claim for damages.
Can a Lease Rejection be Retroactive to a Bankruptcy Filing Date?
Bill Siegel discusses In re Mallett, Inc., and the question of whether rejection of a lease could be retroactive - where breach and bankruptcy are involved.
Debts for a Partner’s or Agent’s Fraud are Still Nondischargeable, Regardless of Culpability of the Innocent Debtor
In a unanimous decision, the U.S. Supreme Court in Bartenwerfer v. Buckley, 598 U.S. 69 (2023), found that an innocent partner having no knowledge of the fraud committed by his partner can still be found to have committed fraud based on one partner being the agent of the other. [...]
Ownership Transfer Restrictions in Corporations, Limited Liability Companies, or Partnerships
Bankruptcy and restrictions on transferability of ownership interests - for entities that are closely held and can be formed in Texas under the Texas Business Organizations Code: partnerships, corporations, and limited liability companies.
Critical Vendor Treatment in Bankruptcy
Critical vendor treatment in bankruptcy is a process that allows a debtor to pay a vendor its pre-petition claim based on the idea that the vendor is so important to the debtor’s business, that ending the relationship would make it very difficult if not impossible for the debtor to reorganize.
