North Carolina Judges Are Shaping ‘Two-Step’ Bankruptcy Future

A Charlotte, N.C., bankruptcy court has taken a leading role in interpreting an increasingly controversial litigation maneuver, paving the way for potential clashes at higher venues—including the US Supreme Court.

Two judges on the US Bankruptcy Court for the Western District of North Carolina over the last six years have answered key questions about the legality of the Texas Two-Step, the legal strategy that Jones Day pioneered when Georgia-Pacific placed its subsidiary, Bestwall LLC, into Chapter 11 in 2017. The maneuver aims to curb liability stemming from claims brought by people who say they became ill from using asbestos-containing talc ...