ARTICLE
9 February 2026

Johnson & Johnson's Texas Two‑Step: A Bankruptcy Strategy Under Scrutiny

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Cowles & Thompson, PC

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Friday, January 30th, a US judge dismissed a lawsuit against pharmaceutical company Johnson & Johnson (J&J), wherein plaintiffs claimed J&J relied on the "Texas Two-Step" as part of its bankruptcy plan.
United States Texas Insolvency/Bankruptcy/Re-Structuring
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Friday, January 30th, a US judge dismissed a lawsuit against pharmaceutical company Johnson & Johnson (J&J), wherein plaintiffs claimed J&J relied on the "Texas Two-Step" as part of its bankruptcy plan. Plaintiffs believe this strategy resulted in fraud related to bankruptcy in the J&J talc division and the judge disagreed, stating plaintiffs failed to prove any real harm caused by the delay.

More on the court's decision and potential investor reaction in this TechStock2article.

Bankruptcy & Creditors' Rights attorney, Bill Siegel first explained the "Texas Two-Step" and how a Divisive Merger is created in this article.

He wrote a follow-up article that covered the LTL Management LLC bankruptcy dismissal and how the Third Circuit looked at "financial distress."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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