Bankruptcy Update
Bankruptcy Update
Asbestos fibers have been associated with disease for decades and have been the subject of litigation in the U.S. since the 1930s. Since the late 1970s, thousands of people exposed to asbestos have been diagnosed with asbestos-related diseases, and the number of lawsuits filed has grown significantly. Rather than pay claims of questionable merit and spend enormous amounts of money in their defense of the claims, many of the companies that were involved with and/or manufactured asbestos-related products have sought Chapter 11 bankruptcy protection.
As part of the Chapter 11 filing process, companies submit their reorganization plan to the court and to their creditors. Most companies decide to set up settlement trusts as part of the plan. These trusts process, liquidate, and pay all valid asbestos personal injury claims according to procedures approved by the bankruptcy court. Many of the companies have substantial amounts of insurance and through these trusts essentially contribute those funds to pay the claims.
One of the advantages of the trust is that individuals without malignancies will be able to seek additional funds should their conditions change or become more severe. Thus far, the trusts that have emerged from the bankruptcies are not distributing funds to the unimpaired, preserving greater amounts for those who deserve compensation.
The disadvantage of the bankruptcy proceedings is the amount of time it can take to bring most of these companies through Chapter 11. It means that you will probably continue to receive funds on a periodic basis over the next several years.
The following provides you with information about current litigation affecting our clients and the status of many bankrupt companies. If you have any questions, please contact us.
Latest Litigation News
The following is the latest information we have on bankrupt companies that may be of particular interest to you. If you have any questions, please contact us.
As of June 2006
Asbestos litigation has changed dramatically over the last several years. Even though there are advertisements in the media paid for by companies seeking congressional relief claiming that the Courts are clogged with asbestos claims, there are actually fewer claims being filed in Court. Other than the cases that were stayed in Philadelphia, there are very few cases pending in courts throughout the country. This is due in large part to the number of companies that have sought Bankruptcy or Chapter 11 protection in the last six years. At this point, there are approximately 35 companies in Chapter 11. Many of these companies have significant assets in the form of insurance and corporate assets, which are going to be the subject of distribution by the Bankruptcy Court, similar to the Manville claims that were filed on your behalf. Many of the bankrupt companies will be using centers such as that established by Manville to distribute funds in a manner similar to the Manville claim process.
Some of the cases that have been pursued by our office and were transferred to Multi-District Litigation remain in Philadelphia. The claims in Philadelphia had one or two defendants remaining and those companies have now sought Chapter 11 protection. For those cases that were pending in the Multi-District Litigation, the claims that remain as to the bankrupt companies will now be able to be resolved through emerging trust distribution procedures.
Most of our clients have claims that remain as to one or more of the companies that are currently in bankruptcy. As those companies emerge, claim forms will be submitted on behalf of anyone who was exposed to that company's products. It is likely that most of the trusts will have specific payments based upon the nature of the diagnosis, for example, malignant and nonmalignant claims.
We may be contacting you regarding additional medical examinations, product identification, or other materials that may be necessary to submit these claims. Most claims will require little, if any, additional material. In most instances, attorney fees are limited by the trust, and the costs of submitting claims, if any, is extremely small.
Anne Chappelle recently attended the asbestos conference in Florida, and the information provided in this Latest Litigation News section was obtained in large part from her attendance at that conference.
Bankruptcy Defendants
Since the first major bankruptcy filing by Johns-Manville Corp., in 1982, nearly 70 companies that either made or installed asbestos insulation or that sold or used products containing asbestos have filed for bankruptcy, with nearly 40 of those being since the beginning of 2000.
Some of these companies were regional distributors, suppliers or contractors. Many of the companies are subsidiaries of other larger corporations. A significant number of these companies had confirmed Plans, but had no assets.
The chart has the following designations: “C” designates a company that is accepting claims; “P” designates a company that remains in Chapter 11 and reorganization is pending; “N/A” designates a company that either has no remaining assets or is not appropriate for filing claims.
Because so many of the companies have emerged from bankruptcy in the last two years, the claim filing and payment process has slowed considerably. Some of the claims are paid within three to six months of submission, some take a significantly longer period of time.
Many of the facilities which process the claims have had to hire people unfamiliar with asbestos claims. Some claims are sent back for deficiencies, either because additional information is required, or because the review of the claim was not adequate.
Additionally, if there was a diagnosis or lawsuit prior to the date of the bankruptcy filing or the case was settled before the filing, no additional claim is allowed. We are continuing to submit and process claims until each case has been reviewed and appropriate claims filed.
KEY:
C - accepting claims
P - remains in Chapter 11/pending
N/A - no assets/not appropriate
DATE - Date entered chapter 11
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ABB Lummus Global 2006—C A-Best Products 2002—C ACandS, Inc. 2002—C Amatex Corp. 1982—C AP Green Industries 2002—C API, Inc. 2005—C Armstrong World Industries 2000—C Artra Group, Inc. 2002—C Asarco, Inc. 2005—P Asbestos Claims Management Corp. 2002—C Atlas Corp. 1998—N/A |
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Babcock & Wilcox Co. 2000—C Baldwin Ehret Hill 1993—P Bethlehem Steel 2001—N/A |
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Carey Canada, Inc. 1990—C Celotex Corp. 1990—C C.E. Thurston 2003—C Combustion Engineering 2003—C Congoleum Corp. 2003—P |
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Eagle Pitcher Industries 1991—C EJ Bartells Co., Inc. 2001—C |
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Federal Mogul Corp. 2001—P Fibreboard 1993—C Flexitallic 2000—P Flintkote Co. 2004—P Flintkote Mines Ltd. 2004 Forty-Eight Insulations 1985—P |
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GAF Corp. 2000—P Gatke Corp. 1987—N/A G-I Holdings 2001—P GIT/APG Silica 2002—P |
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Halliburton 2003—C Harbison-Walker Refractory Co. 2002—C H.K. Porter Co., Inc. 1991—C |
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Johns-Manville Corp. 1982—C JT Thorpe (S.D. Tex.) 2002—C JT Thorpe (C.D. Cal.) 2004—C |
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Kaiser Aluminum Corp. 2002—C Keene Corp. 1993—C Kellog Brown & Root/DII 2003—C |
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Mid-Valley (Halliburton subsidiaries) 2003—C |
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National Gypsum 1990—C North American Refractories Co. (NARCO) 2002—P |
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Owens Corning 2000—C |
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Pfizer 2004/Quigley Co. 2004—P Philadelphia Asbestos Corp. (Pacor) 1986—C Philip Carey Co. 1990—C Pittsburgh Corning 2000—P Plibrico Co. 2002—C Porter-Hayden Co. 2002—C Proko Industries—N/A |
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Raymark Corp./Raytech Corp. 1989—P Rock Wool Manufacturing 1996—N/A Rutland Fire Clay Co. 1999—N/A |
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Shook & Fletcher Insulation Co. 2002—C Synkoloid (Artra Group) 2002—C |
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Thorpe Insulation Co. 2007—P Todd Shipyards 1987—N/A |
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Unarco Industries, Inc. 1982—C United States Mineral Products 2001—P UNR Industries, Inc. 1982—C USG Corp. 2001—C Utex Industries 2004—N/A |
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Western Macarthur 2002—C W.R. Grace Co. 2001—P |
