The objection lodged in the Chrysler proceedings by a representative for asbestos plaintiffs, Ms. Pascale, once again illustrates the importance of the issues to be decided in the Manville/Travelers case awaiting a US Supreme Court decision on the scope of bankruptcy court jurisdiction. Specifically, paragraph 8 of the pleading sets out the following objection regarding the scope of injunctions that may be issued by they Chrysler bankruptcy court:
[5] "The Sale Transaction, including any affiliated agreements and
proposals, provides for releases of, or injunctions in favor of,
non-Debtor third parties, outside of a plan of reorganization and
to the detriment of unsecured creditors as a whole and tort
claimants in particular."
Full Text of All Objections by Ms. Pascale:
Less than self-evident on the docket, the pleading is docket number 1175, filed May 19. The objection in itself is quite brief as it consists of only nine numbered paragraphs. Ms. Pascale is identified in paragraphs 5 and 6 as the widow of an individual who allegedly died from mesothelioma, with a wrongful death action pending in California in Los Angeles as case number BC 345910, and a trial date of June 15, 2009.
In paragraph 8 of the objection, Ms. Pascale sets out the following six objections (but with numbers added by me for ease of reference):
Mrs. Pascale objects to the 363 Motion on the following grounds:
1) The 363 Motion purports to grant successor liability protections
to New Chrysler from asbestos personal injury and wrongful
death claims, but the 363 Motion fails to comply with the
statutory requirements of 11 U.S.C. § 524(g).
2) As currently structured, sale of substantially all of Chrysler’s
assets constitutes an impermissible sub rosa plan of
reorganization and includes various releases, assumptions and
discriminatory treatment which would be prohibited in a plan.
3) The 363 Motion does not specify what will happen to tort claims
like Mrs. Pascale’s. Such claims are not listed among the
Assumed Liabilities that Fiat will assume. The Debtors should
be required to explain how tort claims will be treated and what
assets, if any, will be available for payment of tort claims if the
Sale Transaction is approved and consummated.
4) The Sale Transaction, including any related ancillary
agreements, as currently structured, allocates proceeds and
consideration of the sale disproportionately in favor of certain
unsecured creditors to the detriment of other, similarly situated
unsecured creditors, including Mrs. Pascale, and is not in the
best interests of unsecured creditors as a whole.
5) The Sale Transaction, including any affiliated agreements and
proposals, provides for releases of, or injunctions in favor of,
non-Debtor third parties, outside of a plan of reorganization and
to the detriment of unsecured creditors as a whole and tort
claimants in particular.
6) Chrysler has not met and cannot meet its burden to
demonstrate that the sale of substantially all of its assets as
contemplated by the 363 Motion satisfies all of the requirements
of 11 U.S.C. § 363 and General Order M-331 of this Court.
Naming and Politics in Chapter 11 Cases: It's interesting to watch the politics and gamesmanship in bankruptcy court. As previously covered here on this blog, the asbestos objector constituency was officially recognized by The Office of the US Trustee and given a seat on the Official Committee of Unsecured Creditors as shown at docket number 366. Moreover, Chrysler's asbestos issues are no secret to analysts or others, and finally started being mentioned in public articles around May 6.
One might then think that Ms. Pascale might readily identify use the title of her pleading to readily identify the constituency she represents. But, the title of the objection does not on its face reveal the reality that the objection is being asserted by an asbestos claimant, and instead bears the ponderous title:
OBJECTION OF UNSECURED CREDITORS COMMITTEE MEMBER,
PATRICIA PASCALE, TO MOTION OF DEBTORS AND DEBTORS IN
POSSESSION, PURSUANT TO SECTIONS 105, 363 AND 365 OF THE
BANKRUPTCY CODE AND BANKRUPTCY RULES 2002, 6004 AND 6006,
FOR (I) AN ORDER (A) APPROVING BIDDING PROCEDURES AND
BIDDER PROTECTIONS FOR THE SALE OF SUBSTANTIALLY ALL OF
THE DEBTORS’ ASSETS AND (B) SCHEDULING A FINAL SALE
HEARING AND APPROVING THE FORM AND MANNER OF NOTICE
THEREON; AND (II) AN ORDER (A) AUTHORIZING THE SALE OF
SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS, FREE AND CLEAR
OF LIENS, CLAIMS, INTERESTS AND ENCUMBRANCES, (B)
AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF CERTAIN
EXECUTORY CONTRACTS AND UNEXPIRED LEASES IN CONNECTION
THEREWITH AND RELATED PROCEDURES, AND
(C) GRANTING CERTAIN RELATED RELIEF
Tuesday, May 26, 2009
Monday, May 25, 2009
Asbest: The Russian Town that Is All About Producing Asbestos and the Dangers of Amphibole Fibers
A May 5, 2009 Slate article by Shaun Walker is about Russian towns that revolve around one industry. Such towns, he says, are known as monogorods. As it happens, he chose to write about the monogorod town of Asbest.
The article caught my eye for two reasons. One is the scope of the industry - according to Mr. Walker:
"There are 19 different factories and workshops that make up UralAsbest, the company that defines the town, he told me, and more than 70 percent of the families living in the town have at least one member who works there. He handed me an English-language brochure called "Asbestos Saves Lives."
The other noteworthy point is the town/industry's focus on the controversies over the toxicity of various types of asbestos fibers, and short, glib answers to complex questions. Plaintiff's lawyers hate to admit it, but the reality is that amphibole fibers (usually crocidolite or amosite) are by all accounts far more "toxic" than are chrysotile fibers. That said, some chrysotile fibers from some mines are "tainted" by amphibole fibers. The subtlies, however, usally are not discussed, as is the case in ths town of Asbest:
Kholzyakov sat back in his chair and let out a long sigh. "The thing is, amphibole asbestos, which was used in Europe, really was dangerous. But we mine chrysotile asbestos here, which is perfectly safe. It's only because companies in the West have made expensive substitutes that there is a campaign to ban us."
The party line in Asbest jibes well with a Pravda item on asbestos use. The full text of the article is below with the first three items reaaranged to appear at the top of the list. Bear in mind this is from the English version of Pravda.
http://english.pravda.ru/science/19/94/377/16671_world.html
10 myths of the past, which never materialized.
Environmental pollution: some people feared that the civilization would come to end by 2020 due to sky-high levels of industrial and communal pollution which should result in a lack of oxygen and poisonous evaporation.
Asbestos: Micro particles of asbestos cause lung cancer. Asbestos was produced in Canada and the USSR. Canadian asbestos companies went bankrupt following an anti-asbestos propaganda campaign instigated by the competitors. Russia's asbestos makers have survived the bad times. The incidence rate of cancer in the town of Asbest does not exceed an average national incidence rate of cancer.
Global warming: industrial emissions of carbon dioxide cause the greenhouse effect that leads to overheating of the earth's surface. Consequently, polar ice will melt away causing the global ocean level rise by one meter.
Steam-driven locomotive: serious scientists were asserting that cows would stop bearing offspring and produce milk at the sight of a locomotive. They also clamed that air would be squeezed out of train carriages at 20 km per hour and passengers will suffocate as a result.
Robot: intelligent machines will shake off dependence and take command of the world; humans would submit to the power of the machines.
Spacecraft: spacecraft were making holes in the atmosphere during the takeoff; the earth's protective anti-radiation layer of the atmosphere will be eventually destroyed and thus the earth will be exposed to dangerous space particles.
Microwave oven: fried sausages can irradiate in the dark; radiation from food cooked in the oven will pile up in the human body and cause cancer.
Cell phone: radiation emitted by a cell phone receiver can affect the brain by liquefying it. Paradoxically, a cell phone phobia could not stop the massive spread of cellular communications all over the world.
Vaccination: the danger of vaccination is one of the longstanding fears in the world; the first objectors appeared shortly after the first vaccination campaign launched by Dr. Edward Jenner in 1796; many objected to vaccination in Russia at the end of the 1990s.
The article caught my eye for two reasons. One is the scope of the industry - according to Mr. Walker:
"There are 19 different factories and workshops that make up UralAsbest, the company that defines the town, he told me, and more than 70 percent of the families living in the town have at least one member who works there. He handed me an English-language brochure called "Asbestos Saves Lives."
The other noteworthy point is the town/industry's focus on the controversies over the toxicity of various types of asbestos fibers, and short, glib answers to complex questions. Plaintiff's lawyers hate to admit it, but the reality is that amphibole fibers (usually crocidolite or amosite) are by all accounts far more "toxic" than are chrysotile fibers. That said, some chrysotile fibers from some mines are "tainted" by amphibole fibers. The subtlies, however, usally are not discussed, as is the case in ths town of Asbest:
Kholzyakov sat back in his chair and let out a long sigh. "The thing is, amphibole asbestos, which was used in Europe, really was dangerous. But we mine chrysotile asbestos here, which is perfectly safe. It's only because companies in the West have made expensive substitutes that there is a campaign to ban us."
The party line in Asbest jibes well with a Pravda item on asbestos use. The full text of the article is below with the first three items reaaranged to appear at the top of the list. Bear in mind this is from the English version of Pravda.
http://english.pravda.ru/science/19/94/377/16671_world.html
10 myths of the past, which never materialized.
Environmental pollution: some people feared that the civilization would come to end by 2020 due to sky-high levels of industrial and communal pollution which should result in a lack of oxygen and poisonous evaporation.
Asbestos: Micro particles of asbestos cause lung cancer. Asbestos was produced in Canada and the USSR. Canadian asbestos companies went bankrupt following an anti-asbestos propaganda campaign instigated by the competitors. Russia's asbestos makers have survived the bad times. The incidence rate of cancer in the town of Asbest does not exceed an average national incidence rate of cancer.
Global warming: industrial emissions of carbon dioxide cause the greenhouse effect that leads to overheating of the earth's surface. Consequently, polar ice will melt away causing the global ocean level rise by one meter.
Steam-driven locomotive: serious scientists were asserting that cows would stop bearing offspring and produce milk at the sight of a locomotive. They also clamed that air would be squeezed out of train carriages at 20 km per hour and passengers will suffocate as a result.
Robot: intelligent machines will shake off dependence and take command of the world; humans would submit to the power of the machines.
Spacecraft: spacecraft were making holes in the atmosphere during the takeoff; the earth's protective anti-radiation layer of the atmosphere will be eventually destroyed and thus the earth will be exposed to dangerous space particles.
Microwave oven: fried sausages can irradiate in the dark; radiation from food cooked in the oven will pile up in the human body and cause cancer.
Cell phone: radiation emitted by a cell phone receiver can affect the brain by liquefying it. Paradoxically, a cell phone phobia could not stop the massive spread of cellular communications all over the world.
Vaccination: the danger of vaccination is one of the longstanding fears in the world; the first objectors appeared shortly after the first vaccination campaign launched by Dr. Edward Jenner in 1796; many objected to vaccination in Russia at the end of the 1990s.
Sunday, May 24, 2009
Sign Up Tomorrow for Great Looking UCLA - RAND Conference on Litigation Funding - June 2, 2009 in Santa Monica
My friend Steve Sellick points out that UCLA and RAND are teaming up and presenting an interesting June 2 seminar at RAND in Santa Monica on litigation funding. As I've mentioned before in a Corporate Counsel "special section "article and on this blog, the existence of material amounts of capital available for litigation funding is in my opinion a huge development in and driver for litigation.of all kinds, ranging from intellectual property to securities class actions to mass tort personal injury claiming. Moreover, this trend is only going to accelerate as the UK's legal reforms will soon (not later than 2011) allow direct outside investment in UK law firms.
The UCLA-RAND seminar speakers include some significant academics and a former President of the British Bar. An online invitation to the seminar is available here . Attendance is free, but advance registration is required by May 25, it says. The academic speakers include UCLA's Prof. Stephen C. Yeazell and Lynn M. LoPucki. I would love to attend but family activities dictate other priorities. Hopefully the papers will be published online after the conference. Sponsors include litigation funders Juridica, IM Litigation Funding and Oxbridge, with the latter explicitly saying on its website that it funds mesothelioma claims.
Professor LoPucki is well-known for his many papers on bankruptcy economics, including attorneys' fees. Even more interesting for me is Professor Yeazell because he is the author of wonderful 2001 law review article I cite time and again in discussions regarding the how and why of the nature of our litigation system in the United States. The paper was delivered as part of a seminar sponsored annually by one of Chicago's most respected plaintiffs lawyers, Robert Clifford. The paper is titled:
SYMPOSIUM ARTICLE: THE CHANGING LANDSCAPE OF THE PRACTICE, FINANCING AND ETHICS OF CIVIL LITIGATION IN THE WAKE OF THE TOBACCO WARS: Seventh Annual Clifford Symposium on Tort Law and Social Policy: RE-FINANCING CIVIL LITIGATION , 51 DePaul L. Rev. 183. The paper can be downloaded from this site.
Back to the seminar - the invitation describes the seminar as follows.
"RAND Institute for Civil Justice and UCLA School of Law recently forged a new initiative through which they identify and analyze the biggest and most influential trends in civil justice. One such trend—litigation claim transfer (also referred to as third party litigation funding)—has created the environment for litigation claim transfer to be evaluated as a component of the American civil justice system. The confluence of the recent credit shortage, the enormity of the overall market for legal services, and the search for investment opportunities unrelated to general economic risk has created the supreme environment for litigation claim transfer to expand and thrive.
UCLA-RAND Center for Law and Public Policy is bringing together stakeholders to not only discuss this phenomenon, but to frame how it is debated in government, law schools and state bars across the country. We are pleased to invite you to attend a conference designed to address these important issues on June 2, 2009 at RAND's Santa Monica headquarters. "
The UCLA-RAND seminar speakers include some significant academics and a former President of the British Bar. An online invitation to the seminar is available here . Attendance is free, but advance registration is required by May 25, it says. The academic speakers include UCLA's Prof. Stephen C. Yeazell and Lynn M. LoPucki. I would love to attend but family activities dictate other priorities. Hopefully the papers will be published online after the conference. Sponsors include litigation funders Juridica, IM Litigation Funding and Oxbridge, with the latter explicitly saying on its website that it funds mesothelioma claims.
Professor LoPucki is well-known for his many papers on bankruptcy economics, including attorneys' fees. Even more interesting for me is Professor Yeazell because he is the author of wonderful 2001 law review article I cite time and again in discussions regarding the how and why of the nature of our litigation system in the United States. The paper was delivered as part of a seminar sponsored annually by one of Chicago's most respected plaintiffs lawyers, Robert Clifford. The paper is titled:
SYMPOSIUM ARTICLE: THE CHANGING LANDSCAPE OF THE PRACTICE, FINANCING AND ETHICS OF CIVIL LITIGATION IN THE WAKE OF THE TOBACCO WARS: Seventh Annual Clifford Symposium on Tort Law and Social Policy: RE-FINANCING CIVIL LITIGATION , 51 DePaul L. Rev. 183. The paper can be downloaded from this site.
Back to the seminar - the invitation describes the seminar as follows.
"RAND Institute for Civil Justice and UCLA School of Law recently forged a new initiative through which they identify and analyze the biggest and most influential trends in civil justice. One such trend—litigation claim transfer (also referred to as third party litigation funding)—has created the environment for litigation claim transfer to be evaluated as a component of the American civil justice system. The confluence of the recent credit shortage, the enormity of the overall market for legal services, and the search for investment opportunities unrelated to general economic risk has created the supreme environment for litigation claim transfer to expand and thrive.
UCLA-RAND Center for Law and Public Policy is bringing together stakeholders to not only discuss this phenomenon, but to frame how it is debated in government, law schools and state bars across the country. We are pleased to invite you to attend a conference designed to address these important issues on June 2, 2009 at RAND's Santa Monica headquarters. "
Tuesday, May 19, 2009
Reminder That GIT Asbestos Bankruptcy Argument is Tomorrow in Pittsburgh
Please see the prior post for information on why this case matters for mass tort lawyers concerned about the scope of the injunctions in asbestos bankruptcy cases.
Thursday, May 14, 2009
Response to Question Regarding Whether the Chrysler Bankruptcy Causes a Stay of Underlying Tort Cases as to All Defendants
A comment/question was posed under yesterday's post about the asbestos issues bubbling up in the Chrsyler case. The question is whether the Chrsyler bankruptcy would cause a stay of all underlying asbestos cases as against all defendants. The question is interesting and again underscores the importance of what the US Supreme Court has to say in Travelers/Manville about the scope of bankruptcy court jurisdiction. The short answer is that the bankruptcy code's automatic stay provisions do not stay cases against co-defendants, and adverse existing precedent would have to be overcome to obtain a stay for all defendants based on "related to" jurisdiction in the bankruptcy court.
The "related to" precedent arises from Federal-Mogul's chapter 11 petition filed October 1, 2001. Soon thereafter, some car makers sought to use the FM proceedings as the forum to hold a global Daubert hearing on whether friction products can cause asbestos-related disease. Among other things, there were arguments that the bankruptcy court could exert "related to" jurisdiction based on express or implied indemnity claims that might be asserted against FM by other entities involved with friction products, and various arguments about the inter-related nature of the friction product claims. The asbestos plaintiff's bar vigorously opposed that approach.
Judge Wolin denied the effort, concluding that he lacked jurisdiction. The 3rd Circuit declined to reverse him based on issues regarding its appellate jurisdiction. For a complete synopsis of the issues and rulings from the Crowell & Moring lawyers who have for years represented insurers in asbestos bankrutcies, go here. The 3rd Circuit's opinion, In re Federal-Mogul Global, Inc., 300 F.3d 368 (3rd Cir. 2002) provides the following brief synopsis:
" In re Federal-Mogul Global, Inc., No. 01-10587, 2002 Bankr.LEXIS 105, *4-5 (Bankr.D.Del. Feb. 8, 2002) (hereinafter, Feb. 8 Order). The District Court's written opinion supplementing the order was issued on February 15, 2002. In re Federal-Mogul Global, Inc., No. 01-10578 et al., slip op. (Bankr.D.Del. Feb. 15, 2002) (hereinafter, Feb. 15 Op.).
The District Court held that it lacked subject-matter jurisdiction because the claims against the Friction Product Defendants were not “related to” the Federal-Mogul bankruptcy proceedings. The court found it unlikely that “Congress ... intended that the bankruptcy of a single player [in a multi-player industry] would have automatic, nation-wide impact in which every manufacturer and distributor and all tens of thousands of injured parties are concentrated in a single reorganization proceeding.” Feb. 15 Op. at 16. Specifically, the District Court found that under this court's influential decision in Pacor, Inc. v. Higgins (In re Pacor), 743 F.2d 984 (3d Cir.1984), “related-to bankruptcy jurisdiction [does] not extend to a dispute between non-debtors unless that dispute, by itself, creates at least the logical possibility that the estate will be affected.” Id. at 17.
The District Court noted that Pacor made clear that there is no “related to” jurisdiction over a personal injury claim *376 against a non-debtor “without the filing and adjudication of a separate claim for indemnification” against the debtor. Id. at 18. Further, the District Court observed that “cases since Pacor have failed to endorse the proposition that any contract of indemnification will support an extension of related-to jurisdiction.” Id. at 22 (emphasis in original)."
The "related to" precedent arises from Federal-Mogul's chapter 11 petition filed October 1, 2001. Soon thereafter, some car makers sought to use the FM proceedings as the forum to hold a global Daubert hearing on whether friction products can cause asbestos-related disease. Among other things, there were arguments that the bankruptcy court could exert "related to" jurisdiction based on express or implied indemnity claims that might be asserted against FM by other entities involved with friction products, and various arguments about the inter-related nature of the friction product claims. The asbestos plaintiff's bar vigorously opposed that approach.
Judge Wolin denied the effort, concluding that he lacked jurisdiction. The 3rd Circuit declined to reverse him based on issues regarding its appellate jurisdiction. For a complete synopsis of the issues and rulings from the Crowell & Moring lawyers who have for years represented insurers in asbestos bankrutcies, go here. The 3rd Circuit's opinion, In re Federal-Mogul Global, Inc., 300 F.3d 368 (3rd Cir. 2002) provides the following brief synopsis:
" In re Federal-Mogul Global, Inc., No. 01-10587, 2002 Bankr.LEXIS 105, *4-5 (Bankr.D.Del. Feb. 8, 2002) (hereinafter, Feb. 8 Order). The District Court's written opinion supplementing the order was issued on February 15, 2002. In re Federal-Mogul Global, Inc., No. 01-10578 et al., slip op. (Bankr.D.Del. Feb. 15, 2002) (hereinafter, Feb. 15 Op.).
The District Court held that it lacked subject-matter jurisdiction because the claims against the Friction Product Defendants were not “related to” the Federal-Mogul bankruptcy proceedings. The court found it unlikely that “Congress ... intended that the bankruptcy of a single player [in a multi-player industry] would have automatic, nation-wide impact in which every manufacturer and distributor and all tens of thousands of injured parties are concentrated in a single reorganization proceeding.” Feb. 15 Op. at 16. Specifically, the District Court found that under this court's influential decision in Pacor, Inc. v. Higgins (In re Pacor), 743 F.2d 984 (3d Cir.1984), “related-to bankruptcy jurisdiction [does] not extend to a dispute between non-debtors unless that dispute, by itself, creates at least the logical possibility that the estate will be affected.” Id. at 17.
The District Court noted that Pacor made clear that there is no “related to” jurisdiction over a personal injury claim *376 against a non-debtor “without the filing and adjudication of a separate claim for indemnification” against the debtor. Id. at 18. Further, the District Court observed that “cases since Pacor have failed to endorse the proposition that any contract of indemnification will support an extension of related-to jurisdiction.” Id. at 22 (emphasis in original)."
Wednesday, May 13, 2009
Chrysler's Asbestos Bankruptcy Issues Are Finally Being Mentioned in Public
Update: Yet another article mentions asbestos and provides some big picture facts and thinking. In states, among other things:
"The 60 days projected by the President at an April 30 press conference announcing the automaker’s bankruptcy only applies to a sale of Chrysler’s best assets to a new entity, said the official, who can’t be identified because the matter is confidential. Afterward, creditors would fight over unwanted factories and other assets to recover money, lawyers said.
“The unsold assets and liabilities may take years to sort out due to the complexities of resolving thousands of commercial, tort, future asbestos, dealership and employee claims,” said Dewey & LeBoeuf LLP partner Martin Bienenstock, who has advised General Motors Corp. and Chrysler Financial on restructuring.
The bulk of assets left in the old Chrysler will be eight factories, valued by Chrysler at $2.3 billion. Those with claims against them include the U.S. government, provider of a $4.5 billion bankruptcy loan, and lenders with an unpaid balance of $4.9 billion on a secured loan."
_______________________________________________________________
Popular press articles are now starting to mention the reality that the bankruptcy court at some point will have to sort out Chrysler's legacy liability issues, including asbestos claims. A prior post here pointed out that the asbestos plaintiff's bar has a seat on the unsecured creditors' committee and that plaintiff's firm SimmonsCooper filed an appearance in the case early on to protect the interests of its asbestos clients. One would assume that before the May 20 hearing, the unsecured creditor's committee will have something to say about the distribution of the asset sale proceeds and the scope of the order and injunctive terms related to the sale. For example, will the final order regarding the sale include language purporting to immunize Chrysler and Fiat from facing future claims that the asset sale is a conveyance intended to impair collection of claims by unsecured creditors, including tort claimants with non-asbestos claims and those holding asbestos claims ?
Chrysler's legacy liability issues illustrate the importance of the issues presently pending before the US Supreme Court in the Travelers/Manville case. There, the Court has been asked to decide just how far a bankruptcy court can go in enjoining current and future claims, a topic mentioned in this prior post.
"The 60 days projected by the President at an April 30 press conference announcing the automaker’s bankruptcy only applies to a sale of Chrysler’s best assets to a new entity, said the official, who can’t be identified because the matter is confidential. Afterward, creditors would fight over unwanted factories and other assets to recover money, lawyers said.
“The unsold assets and liabilities may take years to sort out due to the complexities of resolving thousands of commercial, tort, future asbestos, dealership and employee claims,” said Dewey & LeBoeuf LLP partner Martin Bienenstock, who has advised General Motors Corp. and Chrysler Financial on restructuring.
The bulk of assets left in the old Chrysler will be eight factories, valued by Chrysler at $2.3 billion. Those with claims against them include the U.S. government, provider of a $4.5 billion bankruptcy loan, and lenders with an unpaid balance of $4.9 billion on a secured loan."
_______________________________________________________________
Popular press articles are now starting to mention the reality that the bankruptcy court at some point will have to sort out Chrysler's legacy liability issues, including asbestos claims. A prior post here pointed out that the asbestos plaintiff's bar has a seat on the unsecured creditors' committee and that plaintiff's firm SimmonsCooper filed an appearance in the case early on to protect the interests of its asbestos clients. One would assume that before the May 20 hearing, the unsecured creditor's committee will have something to say about the distribution of the asset sale proceeds and the scope of the order and injunctive terms related to the sale. For example, will the final order regarding the sale include language purporting to immunize Chrysler and Fiat from facing future claims that the asset sale is a conveyance intended to impair collection of claims by unsecured creditors, including tort claimants with non-asbestos claims and those holding asbestos claims ?
Chrysler's legacy liability issues illustrate the importance of the issues presently pending before the US Supreme Court in the Travelers/Manville case. There, the Court has been asked to decide just how far a bankruptcy court can go in enjoining current and future claims, a topic mentioned in this prior post.
Tuesday, May 12, 2009
Answers to FAQ's Regarding Asbestos Bankruptcies
Time to put in one place some answers to questions I'm repeatedly asked or ask myself. The list will expand over time.
1) Where are Updated Lists of Asbestos Bankruptcy Cases? Believe it or not, you can find online a very useful set of lists of asbestos bankruptcy cases, including citations to published opinions in the cases. This link will take you to this set of lists thoughtfully maintained in public view by a team of bright lawyers at Crowell & Moring. The team is led by Mark Plevin, and represents insurers in many asbestos bankruptcy cases. They kindly provide periodic updates to the lists and post them online. Just go to this page of the Crowell web site and choose the list you want.
2) Where Are Periodic Commentaries Summarizing the Status of Asbestos Bankruptcies ? The Crowell & Moring team also has published a series of five articles with expert commentary on the status of and key issues in asbestos bankruptcy cases. The articles are titled "Where Are They Now" and can be found at the same page as the bankruptcy lists. Reading these summaries provides a great, manageable lesson in how the cases and issues have evolved.
3) How Much Money Do the Asbestos Trusts Have ? This answer is harder because of course the amount keeps changing. As of November, 2006, the answer was: about $ 30 billion. That answer is set out in an excellent article by economists Charlie Bates and Charlie Mullin who lead an expert team at economic consulting firm Bates White. They know the asbestos bankruptcy topic quite thoroughly. The article's title is "Having Your Tort and Eating it Too?"
1) Where are Updated Lists of Asbestos Bankruptcy Cases? Believe it or not, you can find online a very useful set of lists of asbestos bankruptcy cases, including citations to published opinions in the cases. This link will take you to this set of lists thoughtfully maintained in public view by a team of bright lawyers at Crowell & Moring. The team is led by Mark Plevin, and represents insurers in many asbestos bankruptcy cases. They kindly provide periodic updates to the lists and post them online. Just go to this page of the Crowell web site and choose the list you want.
2) Where Are Periodic Commentaries Summarizing the Status of Asbestos Bankruptcies ? The Crowell & Moring team also has published a series of five articles with expert commentary on the status of and key issues in asbestos bankruptcy cases. The articles are titled "Where Are They Now" and can be found at the same page as the bankruptcy lists. Reading these summaries provides a great, manageable lesson in how the cases and issues have evolved.
3) How Much Money Do the Asbestos Trusts Have ? This answer is harder because of course the amount keeps changing. As of November, 2006, the answer was: about $ 30 billion. That answer is set out in an excellent article by economists Charlie Bates and Charlie Mullin who lead an expert team at economic consulting firm Bates White. They know the asbestos bankruptcy topic quite thoroughly. The article's title is "Having Your Tort and Eating it Too?"
4) Is Valid Science Applied in Asbestos Bankruptcy "Liability Estimates" ? No, according to a an expert witness report submitted in the W.R. Grace asbestos bankruptcy by Dr. James Heckman, a Nobel Prize winning economist at the University of Chicago. Dr. Heckman's expert witness report is here, along with the brief of the WR Grace shareholder committee that submitted the report in support of Grace's attacks on the estimates offered by other witnesses. The report is a scathing indictment of the lack of science and reliability in the estimation process used in asbestos bankruptcies.
5) What Happened in the Federal-Mogul Bankruptcy Regarding the Efforts to Stay all Underlying Asbestos Cases Against All Friction Defendants? The answer is in this prior post.
6) Where is a Terse Summary of the Babcock & Wilcox Chapter 11 and Report of the $415 Million Settlement with Equitas? At this page of the website of Jenner & Block, counsel for the debtor.
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