Abstract
Companies that have manufactured, processed, or sold per- and polyfluoroalkyl substances (“PFAS”), also known as “forever chemicals,” face mounting financial pressure as the number of claims against them skyrocket. With billions of dollars already allocated to settlements and new lawsuits continuously filed, liable corporations may utilize the Texas Two-Step to minimize financial risk. The maneuver would enable solvent companies to isolate PFAS liability and discard it into bankruptcy, potentially delaying and capping payouts for claimants in the process. Third-party releases have survived Purdue, leaving the forum’s ability to permanently resolve mass tort liability intact. Moreover, escalating litigation may prompt Congressional authorization of nonconsensual third-party releases in PFAS cases, mirroring past asbestos reforms and increasing the Texas Two-Step’s appeal.
This Comment argues that “Step One” of the Texas Two-Step, the divisive merger, is a fraudulent transfer, and that “Step Two,” the bankruptcy filing, is a bad faith filing. This Comment asserts that bankruptcy courts should dismiss Texas Two-Step cases as bad faith filings instead of forcing PFAS claimants to bring a fraudulent transfer action. This Comment proposes that the current disparities among bankruptcy courts’ bad faith standards necessitate codification of a good faith requirement contingent on the debtor’s—or in Texas Two-Step cases, the predecessor’s—financial distress. This Comment concludes that prompt redressal of the Texas Two-Step is vital in ensuring that the tort system can rectify PFAS pollution in lieu of regulatory action.
Recommended Citation
Tyler Sheridan,
Asbestos 2.0: A Looming Disaster at the Intersection of PFAS Litigation and the Texas Two-Step––Even After Purdue Pharma,
42
Emory Bankr. Dev. J.
121
(2026).
Available at:
https://scholarlycommons.law.emory.edu/ebdj/vol42/iss1/4