Products liability, corporate structure, and bankruptcy: Toxic substances and the remote risk leadership

Abstract

This paper addresses the interaction of three seemingly unrelated issues. Each is important in its own right; their interaction poses of overwhelming magnitude for our legal system. The three are: (1) In products liability law, should firms be made to bear risks are difficult to foresee? If no one knew that widgets cause scrofula, they do, should widget manufacturers be liable to scrofula victims? Corporate law, to what extent should limited liability isolate firm from products liability victims? Can company X create a subsidiary produce dangerous products and escape liability for the resultant injuries? (3) In bankruptcy law, at least since 1979, can persons exposed to substances assert claims in the manufacturer's bankruptcy if injuries had not materialized by then? If Smith purchases a drug company X in 1980, company X files a bankruptcy petition in 1981, the drug sometimes causes injury to users years after ingestion, far healthy Smith assert a claim in X's

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