A Matter of Trust: Promoting Truth in New York Asbestos Trust Claims with Legislative Solutions

Previously on Asbestos Case Tracker, we took a look at the successful efforts of certain states to combat manipulation and abuse of the asbestos bankruptcy trust system. These states passed legislation that prevents claimants from being doubly compensated for alleged exposures to asbestos-containing products manufactured, used, or supplied by bankrupt and viable companies. The legislation enabled defendants in the tort system to obtain evidence of alternative exposures submitted only to bankruptcy trusts but not during the course of personal injury litigation. New York’s Solution New…
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Third Circuit Denies Defendants’ Request for Unlimited Access to Exhibits Submitted to Bankruptcy Trusts U.S. Court of Appeals, Third Circuit, August 19, 2019

Defendants Honeywell and Ford Motor appealed the District Court’s decision affirming the denial of “unconditional access” to numerous exhibits submitted in connection with “administering nine asbestos bankruptcies.” The court had previously permitted review of the documents for three months with certain limitations. However, unfettered access was denied as doing so would “pose an undue risk of identity theft and exposure to private medical information.” The court concluded that the bankruptcy code permitted protection from disclosure of information that would “create an undue risk of identity…
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Claimants Committee Motion to Dismiss Denied by Bankruptcy Court; Finding that Bestwall’s Bankruptcy Reorganization was not Filed in Bad Faith United States Bankruptcy Court, Western District of North Carolina, July 29, 2019

NORTH CAROLINA – Asbestos claimants (claimants committee) in this Chapter 11 case filed a motion to dismiss the bankruptcy case filed by Georgia Pacific (GP) for its acquisition of Bestwall arguing that the petition was filed in bad faith and established a reorganization that was “objectively futile.” By way of background, GP filed for corporate restructuring in 2017 as a result of “decades long” asbestos litigation liabilities. As many as 64,000 asbestos claims were pending against Bestwall as of the date of the petition alone.…
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Claims Against Manville Insurer Permitted to Proceed For Violation of Due Process U.S.District Court for the Southern District of New York, July 27, 2018

NEW YORK — The plaintiff, Salvador Parra, developed asbestosis after working as an insulator in the 1960s and 1970s. He filed suit in 2009 in Mississippi against numerous Manville-related entities, including Marsh USA, Inc., a Manville insurer. In 1986, Marsh contributed $29.75M to the Manville Trust in exchange for a release of all claims “arising out of or relating to services” performed by Marsh for Manville or “in connection with insurance policies issued to” Manville, and an injunction funneling all future such claims into the…
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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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Bankruptcy Court Grants Asbestos Defendants Limited Access to Bankrupt Trust Exhibits U.S. Bankruptcy Court for the District of Delaware, November 8, 2016

Honeywell International, Inc. who was joined by Ford Motor Company moved for an order authorizing “any entity . . . to access, inspect, copy and receive copies of … any and all of the 2019 Exhibits filed with the Court in compliance with the 2019 Order or Bankruptcy Rule 2019.” In other words, Honeywell and Ford were seeking an order allowing it access to the statements and exhibits which asbestos claimants submitted in the captioned cases pursuant to Rule 2019 of the Federal Rules …
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Appellate Court Grants New Trial Due to Lower Court’s Error on Jury Charge as to “Recklessness Standard” Supreme Court of New York, Appellate Division, Fourth Department

In the matter of the Estate of Lee Holdsworth, in the Supreme Court of New York, Erie County (Lower Court), judgment was entered against the defendant Crane Co. upon a jury verdict finding that Crane Co. was 35 percent liable for the damages arising from injuries sustained by Lee Holdsworth (the plaintiff’s decedent) as a result of exposure to asbestos-containing products used as component parts with the valves that defendant produced. The jury also determined the defendant acted with reckless disregard for the safety of…
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Two Rulings From MDL Allow Previously Dismissed Asbestos Claims to Proceed Against Various Ship Owners Despite Previous Dismissed Actions Not Listed as Assets in Bankruptcy U.S. District Court for the Eastern District of Pennsylvania, January 25, 2016

In a follow-up to six cases previously reported on in ACT, two more cases were decided in the United States District Court for the Eastern District of Pennsylvania. Both cases had started in the Northern District of Ohio, and were transferred to the MDL 875 in the Eastern District of Pennsylvania. In both cases, the plaintiffs brought claims against various ship owners represented by Thompson Hine LLP, and all alleged asbestos exposure while working on ships. All cases were administratively dismissed; after dismissal, the plaintiffs…
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Chunk of Rulings From MDL Allow Previously Dismissed Asbestos Claims to Proceed Even Though Not Listed As Assets In Bankruptcy United States District Court for the Eastern District of Pennsylvania

Six cases were decided in the United States District Court for the Eastern District of Pennsylvania; all started in the Northern District of Ohio, and were transferred to the MDL 875 in the Eastern District of Pennsylvania. In all six cases, the plaintiffs brought claims against various shipowners represented by Thompson Hine LLP, and all alleged asbestos exposure while working on ships. All cases were administratively dismissed; after dismissal, the plaintiffs filed for bankruptcy, and did not list their asbestos claims as assets. After bankruptcy…
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Claim Representatives For Filing Bankruptcy Trust Claims Have No Standing To Sue Bankruptcy Trusts For Suspending Claims U.S. Court of Appeals for the Third Circuit, October 15, 2015

Plaintiff Mandelbrot Law Firm specialized in preparing and filing asbestos personal injury claims  to various bankruptcy trusts. In 2002, one such trust, the Delaware Trusts, suspended all payment of claims from claimants who the plaintiff represented, due to proceedings in California regarding allegedly fraudulent claims filed by the plaintiff.  The plaintiff then filed this declaratory judgment, arguing that this decision was unauthorized and in violation of the Trusts’ distribution procedures, and that he lost fees. The district court granted defendants’ motion to dismiss for lack…
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