Durbin Delivers Opening Statement During Senate Judiciary Committee Hearing On Corporations Evading Accountability By Manipulating Bankruptcy
Floor Speech
"In October of 2021, Johnson & Johnson faced lawsuits from nearly 40,000 Americans who had been diagnosed with ovarian cancer or mesothelioma allegedly caused by the company's talc-based products. Rather than defend against these claims in district court or settle with the victims, Johnson & Johnson used a legal maneuver known as the "Texas Two-Step' in an attempt to skirt and limit accountability.
Corporate bankruptcy plays an important role in our economy. It is meant to allow a company in financial distress to go before a bankruptcy court, agree to certain conditions, and, in exchange, get certain protections But if a company is going to be freed from its debts, there has to be some cost. The company has to accept the oversight of the bankruptcy court. It has to compensate its creditors according to their interests. It has to limit its operations during the course of the proceedings.
The video featured testimony from Kimberly Naranjo, a mesothelioma victim, who testified before this Committee last year and has since passed away. We are joined today by another mesothelioma victim, Justin Bergeron, a young father still fighting to hold Johnson & Johnson accountable. While Johnson & Johnson's potential liability to Ms. Naranjo, Mr. Bergeron, and thousands of other Americans is substantial, it isn't anything the company cannot handle. At the time it executed the "Texas Two-Step', the company was valued at more than $420 billion. That year, it would make nearly $64 billion in profit.
These maneuvers are blatant attempts by wealthy corporations to bypass the mass tort system. To simply decline to be held liable. And we have every reason to expect that corporations--at least those with deep enough pockets--will continue to try to manipulate bankruptcy in similar ways. That's not what Congress intended when it created the bankruptcy system. And, it's not something we should allow to continue."
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