Country Dancing in the Bankruptcy Court: The “Texas Two-Step”
June 1, 2022
Pratt’s Journal of Bankruptcy Law
By Michael Lichtenstein, Bankruptcy, Restructuring & Creditors’ Rights
A popular country dance, the “Texas two-step,” is now in the process of being experimented with in the bankruptcy courts. The trick is to convert a business into a Texas organization that is then split into two entities, one of which retains all the liabilities and the other retains all the assets. The purpose of this carefully choreographed maneuver is to avoid enormous liabilities through using the bankruptcy courts when the entity that holds the liabilities files a bankruptcy petition. Click the link below to read more.