Since 1989, it has been possible under Texas law to divide a business corporation into individual entities by way of a so-called “divisive merger” and to allocate existing liabilities to one of the newly formed entities. The entity burdened with the liabilities files for insolvency under Chapter 11 of the US Bankruptcy Code while the other entities merge back again into a single entity. The aim is to shield the parent corporation from direct liability, e.g. for tortious acts. This special form of corporate restructuring has its basis in the “Texas Business Organizations Code” and, considering the often substantial sums paid out in damages in the USA, offers considerable possibilities to escape financial liability arising from product liability claims. It is almost surprising that such a procedure has only been resorted to three times so far.