Category Archives: Bankruptcy

Channeling Injunction Prohibits General Motor’s Wrongful Death Suit for Contribution against the Manville Trust U.S. Bankruptcy Court, Southern District of New York, July 24, 2017

General Motors (GM) filed suit against the Manville Personal Injury Settlement Trust (Manville) seeking a declaratory order that its state suit against Manville was not barred by the longstanding “Channeling Injunction” of the Manville Corporation’s chapter 11 reorganization (the Plan) and subsequent order confirming the same. Separate from the declaratory complaint, GM filed suit in Ohio state court against the estate of Bobby Bolen and multiple asbestos defendants including Manville. GM alleged the defendants were jointly and severally liable to GM as it had subrogated…

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Summary Judgment Affirmed in Favor of Successor Premises Owner Where Bankruptcy Code Extinguished Claims Superior Court of Pennsylvania, January 26, 2017

Jacqueline and Thomas Wagner filed suit against Standard Steel LLC for Ms. Wagner’s alleged development of mesothelioma as a result of take home exposure from the work clothes of her husband. Mr. Wagner worked as a laborer and crane operator at Freedom Forge from 1970-72. Freedom Forge filed for Chapter 11 protection in 2001. Appellee Standard Steel LLC purchased the sale of Freedom Forge’s assets in 2002. The bankruptcy court confirmed the sale and found: 1) the sale price was fair and reasonable at an…

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Non-Malignant but Not Malignant Claims Part of Bankruptcy Estate U.S. District Court for the Eastern District of Pennsylvania, December 16, 2016

This case is part of the consolidated asbestos products liability multidistrict litigation (MDL 875), and is on the court’s maritime docket. The plaintiffs alleged the decedent William Lawrence was exposed to asbestos while working aboard various ships. Ship owners represented by Thomson Hine (the defendants) filed a motion for summary judgment, which the court denied. In 1996, Mr. Lawrence brought claims for non-malignant asbestos-related disease against various defendants, including the defendant ship owners. Two months later, Mr. Lawrence filed for bankruptcy and did not list…

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Certification of Class for Unmanifested Asbestos Claims in Bankruptcy Court Denied U.S. District Court for the District of Delaware, September 28, 2016

Debtors filed voluntary petitions for relief in the United States Bankruptcy Court; certain debtors’ subsidiaries have potential liability related to former employees’ alleged exposure to asbestos in power plants owned or operated by debtors’ predecessors. The bankruptcy court issued an order setting a bar date for all asbestos claimants, establishing requirements for proofs of claim for manifested and unmanifested asbestos claimants, and notice procedures. Appellants filed a motion seeking to have the court, among other things, certify a class of persons holding unmanifested asbestos claims.…

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Plaintiff Could Not Side-Step Manville Trust by Directly Suing Defendant Where Claim was a Pre-Petition Claim Subject to Discharge by Bankruptcy U.S. Bankruptcy Court for the Southern District of New York, June 30, 2016

The plaintiff, Lynda Berry, filed an asbestos lawsuit in Louisiana against Graphic Packaging International for mesothelioma due secondary exposure from her husband’s work at the Manville Forest Products (MFP) mill from 1961-2010. The plaintiff’s petition included claims against Manville for asbestos it produced, and claims against Graphic for negligently maintaining the premises. Graphic filed an emergency motion for enforcement of the bankruptcy confirmation orders of the Johns-Manville Corporation and MFP. Graphic argued it was a successor of MFP, and as such, the plaintiff must first…

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Although Plaintiff’s Claims Within 1986 Manville Settlement Order, Case Remanded to Bankruptcy Court to Determine If Plaintiff Received Due Process U.S. District Court for the Southern District of New York, March 14, 2016

The plaintiff, Salvador J. Parra, Jr., developed asbestosis after working as an insulator and sued Marsh USA, Inc., an insurance broker, and others. Marsh filed a motion in the bankruptcy cases of Johns-Manville, arguing it was relieved of liability for the plaintiff’s claims. The bankruptcy court granted the motion, and the plaintiff appealed. The district court affirmed in part, reversed in part, and remanded the case to the bankruptcy court for further proceedings. Marsh was Manville’s primary insurance broker from 1944-1982. Manville had sued Marsh,…

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Bankruptcy Stay Lifted Against Defendant/Debtor to Allow Plaintiffs to Pursue State Law Claims U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, February 10, 2016

In this case, the defendant that used asbestos in some of its production while in business filed chapter 11. There remained 123 claims against the defendant and the defendant’s proposed chapter 11 plan stated that the “liability issues will pass through the bankruptcy and be tried in non-bankruptcy courts having jurisdiction.” The defendant objected to the Asbestos Committee’s motion to lift the automatic stay, arguing the stay should remain in place pending plan confirmation. In its analysis, the court applied the Fernstrom three-part balancing test…

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