Congressman Steve Cohen (TN-09), a senior member of the Judiciary Committee, today spoke in favor of and voted to advance to the full House of Representatives, the Nondebtor Release Prohibition Act. The measure would, in part, prevent companies from avoiding the financial consequences of their actions by transferring liabilities to other legal entities and then filing for bankruptcy to avoid losses.
In his remarks at the bill’s markup today, Congressman Cohen said in part:
“This issue is personal to my District – personal to all women of color -- because it directly affected them and was aimed at them. For decades, Johnson & Johnson sold a product with the known carcinogen, asbestos…In my District alone, there are over 60 people whose lives have been damaged by actions of Johnson & Johnson…I believe companies like Johnson & Johnson should be held responsible for the harms they cause. But as is often the case, Johnson & Johnson, among others, has abused the bankruptcy system to shirk responsibility and avoid accountability. They’ve taken what’s known as the ‘Texas Two-Step,’ dividing their assets, dividing their company – the assets in one company, the liabilities in another – then they go to North Carolina to bankruptcy (court)…The result is a company that’s worth almost half a trillion dollars -- $450 billion – chooses bankruptcy to avoid responsibility to the people that they have brought such pain and suffering to.
“This bill would stop this from happening by amending the federal bankruptcy law to assure we do not allow this end run around the law to continue to be used by these corporations. This is not what the bankruptcy law was intended for…
“They knew what they were doing and now they’re trying to get away with it…We should not allow this to happen. This is just morally reprehensible.”
Original source can be found here.
