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Preview: LexisNexis® Mealey's™ Asbestos Bankruptcy Legal News

LexisNexis® Mealey's™ Asbestos Bankruptcy Legal News



Headline Asbestos Bankruptcy Legal News from LexisNexis®



 



Insurer Owes Trustee $3.5M In Policy Limits, Attorney Fees For Coverage Dispute
OAKLAND, Calif. - A California federal bankruptcy judge on Nov. 16 entered a judgment of more than $3.5 million against an insurance company in a dispute over the amount of coverage owed to a company's liquidating trust for asbestos personal injury claims, including attorney fees and a $60,000 penalty for the insurer's "vexatious and unreasonable conduct" in the case (In re CFB Liquidating Corporation, f/k/a Chicago Fire Brick Co., et al., No. 01-45483, [Barry A. Chatz, as Trustee for the CFB/WFB Liquidating Trust v. Continental Casualty Company, No. 15-4136] N.D. Calif. Bkcy., 2017 Bankr. LEXIS 3938).



Garlock, Safety National Dispute Policy Interpretation In Coverage Lawsuit
CHARLOTTE, N.C. - A magistrate judge correctly found that an insurance policy does not provide for arbitration in a dispute with former Chapter 11 debtor Garlock Sealing Technologies LLC and affiliates over coverage for asbestos claims, the companies argue in a Nov. 9 response to the insurer's objections to the magistrate's ruling in North Carolina federal court (Safety National Casualty Corp. v. Garlock Sealing Technologies LLC, et al., No. 3:17-cv-00458, W.D. N.C.).



Insurers Seek Relief From Kaiser Gypsum's Stay To Pursue Costs In Coverage Row
CHARLOTTE, N.C. - Insurers of Chapter 11 debtor Kaiser Gypsum Co. sought relief Oct. 24 from the automatic stay in the debtor's case in North Carolina federal bankruptcy court so they can pursue the repayment of their costs from the debtor's primary insurer in a 15-year-old coverage action in a California state court (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).



Georgia-Pacific Subsidiary Bestwall Files For Bankruptcy Due To Asbestos Liabilities
CHARLOTTE, N.C. - Georgia-Pacific affiliate Bestwall LLC filed a Chapter 11 petition Nov. 2 in North Carolina federal bankruptcy court to create a trust to pay asbestos personal injury claims and receive an injunction forever barring future asbestos claims against the debtor, Georgia-Pacific and their dozens of affiliates (In re Bestwall LLC, No. 17-31795, W.D. N.C. Bkcy.).



Asbestos Claimants' Committee Named For Bestwall's Chapter 11 Case
CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge on Nov. 16 appointed the Official Committee of Asbestos Personal Injury Claimants in the new Chapter 11 case of Bestwall LLC, selecting one of three claimants who requested to sit on the committee in addition to the nine claimants proposed by the U.S. bankruptcy administrator (In re Bestwall LLC, No. 17-31795, W.D. N.C. Bkcy.).



Utah Appeals Dismissal Of Suit Against 4 Trusts To Comply With Investigation
SALT LAKE CITY - Utah has appealed the dismissal of its fraud investigation lawsuit against four asbestos trusts to the Utah Supreme Court, which issued an order Nov. 9 saying it will transfer the case to the Utah Court of Appeals unless any party files a request for the high court to retain the case (State of Utah v. Armstrong World Industries Asbestos Personal Injury Settlement Trust, et al., No. 20170887-SC, Utah Sup.).



Bankruptcy Court OKs Deal Between Texas Claimants, Pittsburgh Corning Trust
PITTSBURGH - A Pennsylvania federal bankruptcy judge on Nov. 9 approved a settlement under which more than 2,000 asbestos claimants from a decades-old consolidated Texas litigation will share up to $178.5 million from the asbestos trust established in the Pittsburgh Corning Corp. (PCC) bankruptcy case (In re: Pittsburgh Corning Corporation, No. 00-22876, W.D. Pa. Bkcy.).



Geo. V. Hamilton Continues Plan Discussions With Asbestos Claimants
PITTSBURGH - Negotiations between Chapter 11 debtor Geo. V. Hamilton Inc. and asbestos claimants on the company's proposed plan of reorganization continue, with the parties scheduled to file a report on their progress within a week, according to a Pennsylvania federal bankruptcy judge's Nov. 17 minute order (In re Geo. V. Hamilton, Inc., No. 15-23704, E.D. Pa. Bkcy.).



Montana High Court Finds Bankruptcy Stay Tolled Asbestos Suits Against Railway
HELENA, Mont. - W.R. Grace's bankruptcy order enjoining new litigation tolled the Federal Employer's Liability Act (FELA) three-year statute of limitations for suing an associated railroad that allegedly exposed a worker to asbestos-contaminated vermiculite, the Montana Supreme Court held Nov. 14 (Kelly G. Watson v. BNSF Railway Co., et al., No. DA 17-0229, Mont. Sup., 2017 Mont. LEXIS 678).



Los Angeles Jury Returns Asbestos Verdict For J&J, Talc Miner
LOS ANGELES - A California jury on Nov. 16 returned a verdict in favor of Johnson & Johnson in the first ever cosmetic-talc asbestos case taken to trial against the company, while also handing a defense verdict to the company that mined the raw talc, sources told Mealey Publications (Tina Herford, et al. v. AT&T Corp., et al., No. BC646315, Calif. Super., Los Angeles Co.).



Boiler, Furnace Companies, Supply Houses Secure Verdict In Pa. Asbestos Trial
SCRANTON, Pa. - A Pennsylvania jury on Nov. 15 returned a defense verdict for a handful of boiler and furnace manufacturers and parts supply houses, finding that the asbestos-containing products in question were not unreasonably dangerous and that none of the five defendants acted negligently (Diane Horst, et al. v. Union Carbide Corp., et al., No. 15 CV 1903, Pa. Comm. Pls., Lackawanna Co.).



Justice Reduces, But Otherwise Affirms Asbestos Verdict For Bus Driver
SYRACUSE, N.Y. - An automotive parts company on Nov. 8 lost its bid for a new trial in a New York asbestos case brought on behalf of a school bus driver but succeeded in getting the verdict cut nearly in half to $3.47 million (The estate of Lewis Nash, et al. v. A.W. Chesterton Company Inc., et al., No. 2012-000719, N.Y. Sup., Onondaga Co.).



California Jury Finds For Adhesives Company In Asbestos Trial
LOS ANGELES - A California jury on Oct. 27 rejected claims that asbestos in a company's aerospace adhesives caused a woman's fatal mesothelioma, returning a defense verdict for Dexter Hysol Aerospace, sources told Mealey Publications (Velma Searcy v. 3M Co., et al., No. BC612205, Calif. Super., Los Angeles Co.).



Pennsylvania Supreme Court Agrees To Address Asbestos Bare-Metal Defense
PHILADELPHIA - The Pennsylvania Supreme Court on Oct. 26 accepted a certified question from the Third Circuit U.S. Court of Appeals under which it will decide whether manufacturers can be held liable for asbestos-containing parts they neither manufactured nor supplied and what standard determines liability if such a duty exists (In re: Asbestos Products Liability Litigation (No VI) Crane Co., No. 110EM 2017, Pa. Sup.).



Federal Judge Vacates Even Split Of $20M Fee Award For Insurance Settlement
NEW YORK - While a $20 million attorney fee agreement for a settlement between an insurer and asbestos claimants does not say the money is to be divided unevenly among the four law firms that negotiated the settlement, it also does not say the fees are to be divided equally, a New York federal judge found Sept. 29 in reversing a bankruptcy court ruling awarding $5 million to each firm (Bevan & Associates, LPA, Inc., et al. v. Eric Bogdan, et al., No. 16-cv-7154, S.D. N.Y., 2017 U.S. Dist. LEXIS 164219).



Judge Tosses Utah's Suit Seeking To Force Trusts To Comply With Investigation
SALT LAKE CITY - Utah's brief attempt at forcing four asbestos trusts to participate in the state's fraud investigation of the trusts ended Oct. 6 when a state judge dismissed the state's lawsuit on jurisdiction grounds, and on the merits, saying Utah exceeded its authority and issued investigative demands that are "overbroad" and "intrusive" (State of Utah v. Armstrong World Industries Asbestos Personal Injury Settlement Trust, et al., No. 170901496, Utah 3rd Dist., Salt Lake Co.).



Pittsburgh Corning Trust To Pay Up To $178.5 Million In Deal With Claimants
PITTSBURGH - More than 2,000 asbestos claimants from a decades-old consolidated Texas litigation will share up to $178.5 million from the asbestos trust established in the Pittsburgh Corning Corp. (PCC) bankruptcy case, according to a notice and settlement filed Oct. 18 in Pennsylvania federal bankruptcy court (In re: Pittsburgh Corning Corporation, No. 00-22876, W.D. Pa. Bkcy.).



N.Y. Court Told To Nix Asbestos Punitive Damages, Safeguard Trust Transparency
NEW YORK - An appeals court should vacate a provision of the new case management order allowing for punitive damages in asbestos cases and vacate or amend a provision governing how asbestos bankruptcy trust claims are handled, an amicus curiae group told the court on Oct. 10 (In re: New York City Asbestos Litigation, All Asbestos Cases., No. 40000/1988 782000/2017, N.Y. Sup., App. Div., 1st Dept.).



Rapid-American Seeks Protective Order For Insurers' Subpoenas
NEW YORK - A declaratory insurance coverage action filed by Chapter 11 debtor Rapid-American Corp. is not the proper vehicle for insurers to use in search of evidence of fraud in the asbestos trust system, the debtor says in an Oct. 20 motion and memorandum seeking protection from the insurers' subpoenas in New York federal bankruptcy court (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).



Arbitration Not Available For Coverage Dispute Based On Policy, Judge Rules
CHARLOTTE, N.C. - Former Chapter 11 debtor Garlock Sealing Technologies LLC does not have to arbitrate a dispute with an insurer over a policy's coverage for asbestos claims because an arbitration provision in the policy is deleted by another provision stating that the policy's terms must match those of an umbrella policy that contains no arbitration provision, a North Carolina federal bankruptcy judge held Oct. 12 (Safety National Casualty Corp. v. Garlock Sealing Technologies LLC, et al., No. 3:17-cv-00458, W.D. N.C.).



Oakfabco Rejects $9.7 Million Settlement With Asbestos Insurers
CHICAGO - An Illinois federal bankruptcy judge on Oct. 2 authorized Chapter 11 debtor Oakfabco Inc. to reject a $9,783,000 settlement with asbestos insurers after the company said it is in the best interests of its bankruptcy estate to focus on confirming a plan of liquidation and have its "right and remedies" under the policies at issue determined afterward (In re: Oakfabco, Inc., No. 15-27062, N.D. Ill. Bkcy.).



Interest Rate Ruling Boosts IRS Refund To W.R. Grace Debtors By $1.6 Million
WILMINGTON, Del. - Reorganized chemical conglomerate W.R. Grace & Co. will receive an additional $1.6 million tax refund from the U.S. government after a Delaware federal bankruptcy judge found Oct. 23 that the Internal Revenue Service used the wrong percentage rate when figuring the refund (In re: W.R. Grace & Co., et al., No. 01-01139, D. Del. Bkcy, 2017 Bankr. LEXIS 3679).



Honeywell, Ford Dispute Charges For Redaction Of Asbestos Claimants' Data
WILMINGTON, Del. - The cost of redacting personal information in asbestos claimants' data from nine bankruptcy trusts should not be borne by Honeywell International Inc. or Ford Motor Co., which are seeking the data to mine for evidence of fraud, based on the plain language of the U.S. Bankruptcy Code, the companies argue in an Oct. 2 brief on appeal in Delaware federal court (In re: Motions Seeking Access to 2019 Statements, No. 16-1078, D. Del.).



John Crane, Oregon Plaintiffs Square Off On $3M Punitive Damages Award
PORTLAND, Ore. - A jury properly awarded $3 in punitive damages against a company that sold asbestos-containing products without providing a warning, even while it was protecting its employees from exposure, plaintiffs told an Oregon court Sept. 29. But in an Oct. 3 reply, the company argues that the plaintiffs' claim was "flawed from inception" and that their argument in support ignores significant facts (Robert G. Sprague Jr., et al. v. A.W. Chesterton Co., et al., No. 15CV14771, Oregon Cir., Multnomah Co.).



Premises Owner Says $12.9M Asbestos Verdict Unfounded, Inconsistent
OAKLAND, Calif. - A jury's finding that a premises owner, but not the manufacturers of the products in question, is liable for a man's asbestos exposure is inconsistent and ignores the paucity of evidence of exposure, a food company told a California judge on Oct. 2 (Lanette Louise Lopez, et al. v. The Hillshire Brands Co., RG14721622, Calif. Super., Alameda Co.).



Jury Awards $6.8 Million In 2nd Massachusetts Asbestos Trial
WOBURN, Mass. - For the second time in nine days, a Massachusetts jury on Sept. 29 handed down a multimillion asbestos verdict, this time handing $6.8 million to a widow who claims that her deceased husband suffered exposure while serving as a part-time insulator while in school (Amy Ross, et al. v. New England Insulation Co., et al., No. 13-5580, Mass. Super., Middlesex Co.).



3rd Circuit: Maritime Negligence Claims Survive Asbestos Bare-Metal Defense
PHILADELPHIA - The bare-metal defense does not bar asbestos negligence actions under maritime law's "bedrock principle" of protecting sailors, a Third Circuit U.S. Court of Appeals panel held Oct. 3 (In re: Asbestos Products Liability Litigation [No. VI], Roberta G. DeVries, et al. v. Buffalo Pumps Inc., et al., No. 16-2602, Shirley McAfee, et al. v. Ingersoll-Rand & Co., No. 16-2669, 3rd Cir.).



Insurer Cannot Litigate Coverage Dispute In State Court, Bankruptcy Judge Says
OAKLAND, Calif. - A California federal bankruptcy judge on Aug. 24 denied an insurer's request to sue a company's asbestos trust in state court over the amount of coverage owed for asbestos personal injury claims, issuing a strong rebuke to the insurer's attorneys, who claimed that the trustee knew the claims he submitted to the insurer did not trigger the polices at issue (In re CFB Liquidating Corporation, f/k/a Chicago Fire Brick Co., et al., No. 01-45483, N.D. Calif. Bkcy., 2017 Bankr. LEXIS 2411).



Arbitration Not Available For Coverage Dispute Based On Policy, Garlock Says
CHARLOTTE, N.C. - Former Chapter 11 debtor Garlock Sealing Technologies LLC does not have to arbitrate an insurance coverage dispute with an insurer based on the plain language of the 1983 policy at issue, Garlock and affiliates argue in a Sept. 22 response to the insurer's motion to force arbitration in North Carolina federal court (Safety National Casualty Corp. v. Garlock Sealing Technologies LLC, et al., No. 3:17-cv-00458, W.D. N.C.).



Kaiser Gypsum's Stay Lifted To Allow Appeals In Coverage Dispute
CHARLOTTE, N.C. - The primary asbestos insurer for Chapter 11 debtor Kaiser Gypsum Co. can pursue appeals of rulings in all three phases of coverage litigation in California state court, a North Carolina federal bankruptcy judge ruled in a Sept. 20 minute order lifting the automatic stay in the bankruptcy case to allow the appeals to proceed (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).



Split 9th Circuit Sends Row Over Lawyer's Trust Claims Ban Back To Trial Court
SAN FRANCISCO - A California federal court must decide on remand whether federal or state law controls - and whether a Ninth Circuit U.S. Court of Appeals decision impacts - two asbestos trusts' attempt to enforce a settlement under which an attorney agreed to stop filing claims with the trusts due to his pattern of presenting unreliable evidence, a divided Ninth Circuit panel held Aug. 14 (Michael J. Mandelbrot, et al. v. J.T. Thorpe Settlement Trust and Thorpe Insulation Company Asbestos Settlement Trust, No. 15-56430, 9th Cir., 2017 U.S. App. LEXIS 17924).



3rd Circuit Affirms Asbestos Attorney's Overbilling Restitution Sentence
PHILADELPHIA - A lawyer who pleaded guilty to inserting his firm's clients as defendants and then billing them as if he represented them in the cases cannot contest a portion of his restitution sentence he claims was legitimately spent, the Third Circuit U.S. Court of Appeals held Aug. 29 (United States v. Arobert C. Tonagbanua, No. 17-1815, 3rd Cir., 2017 U.S. App. LEXIS 16506).



Finding That Bankruptcy Asset Sale Bars Take-Home Asbestos Case Stands
HARRISBURG, Pa. - The Pennsylvania Supreme Court on Sept. 8 declined to review an appellate court's rejection of a widower's attempt to hold a company liable for his wife's death from mesothelioma and finding that the company's "free and clear" purchase of assets in a bankruptcy court auction barred his take-home asbestos exposure claims (Jacqueline S. Wagner, et al. v. Standard Steel LLC, et al., No. 80 EAL 2017, Pa. Sup.).



Son's Constitutional Due Process Claims Against Trust Shot Down By Judge
WILMINGTON, Del. - A son cannot pursue claims that an asbestos personal injury trust violated his deceased father's constitutional rights because the trust is a private entity and is not an arm of the government, a Delaware federal judge held Sept. 22 (Matthew D. Pinnavaia v. The Celotex Asbestos Settlement Trust, No. 16-742, D. Del., 2017 U.S. Dist. LEXIS 155340).



Court Affirms Exclusion Of Asbestos Product ID Testimony As Sanction
CLEVELAND - A trial judge properly excluded deposition testimony as a sanction for failing to update interrogatories to indicate potential drywall compound exposures the witnesses testified to in asbestos bankruptcy claim forms, an Ohio appeals court held Sept. 7 (Paul Heaton, et al. v. Ford Motor Co., et al., No. 104636, Ohio App., 8th Dist., 2017 Ohio App. LEXIS 3800).



Railroad Asks Mississippi High Court To Allow Setoff Of FELA Asbestos Verdict
JACKSON, Miss. - The Mississippi Supreme Court should follow federal common law and allow a defendant to offset a Federal Employers' Liability Act (FELA) asbestos-related lung cancer award with recoveries the plaintiff received from asbestos bankruptcy trusts, a railroad argues in a Sept. 5 supplemental brief (Illinois Central Railroad Co. v. Bennie Oakes, et al., No. 2015-TS-00644, Miss. Sup.).



John Crane's RICO Suit Against Shein Firm Stayed Pending 7th Circuit Decision
PHILADELPHIA - A Pennsylvania federal judge on Sept. 7 stayed a case filed by John Crane Inc. (JCI) alleging fraud and racketeering claims against an asbestos plaintiffs' law firm pending a decision by the Seventh Circuit U.S. Court of Appeals in appeals filed by JCI and the law firm to the dismissal of identical claims by an Illinois federal court for lack of jurisdiction (John Crane Inc. v. Shein Law Center Ltd., et al., No. 2:17-cv-02210, E.D. Pa.).



Law Firm's 4th Circuit Appeal Dismissed As Per Garlock's Reorganization Plan
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on Sept. 7 dismissed an appeal filed by attorneys accused of fraud and racketeering by Chapter 11 debtor Garlock Sealing Technologies LLC after the parties agreed to drop the appeal as part of a global settlement ending Garlock's bankruptcy case (Garlock Sealing Technologies LLC, et al. v. Simon Greenstone Panatier Bartlett, APLC, et al., No. 15-2178, 4th Cir.).



Kaiser Gypsum Gets 3 More Months To File Reorganization Plan
CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge on Sept. 22 gave Chapter 11 debtor Kaiser Gypsum Co. three more months to file a plan of reorganization, despite unsecured creditors' concerns that the reorganization process is taking too long (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).



Claims Against Garlock Face Asbestos Trust Procedures After Reclassification
CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge agreed Sept. 25 to reclassify 72 claims against the bankruptcy estate of former Chapter 11 debtor Garlock Sealing Technologies LLC from general unsecured claims to asbestos claims (In re: Garlock Sealing Technologies, LLC, et al., No. 10-31607, W.D. N.C. Bkcy.).



Massachusetts Jury Awards $7.55M In Asbestos-Insulation Case
WOBURN, Mass. - A Massachusetts jury on Sept. 20 found a company liable under negligence and breach of warranty claims for its installation of asbestos-containing insulation and awarded a couple $7.55 million for a man's resulting mesothelioma (Gerald and Marjorie Sylvestre v. New England Insulation Co., et al., No.15-7031, Mass. Super., Middlesex Co.).



6th Circuit Affirms Dismissal Of Ship Owners In Asbestos Cases
DETROIT - Dismissal for ship owners for lack of jurisdiction in thousands of Merchant Marine asbestos cases was proper, the Sixth Circuit U.S. Court of Appeals held Sept. 13 (Henry Kalama, et al. v. Matson Navigation Co. Inc., et al., No. 16-3408, 6th Cir., 2017 U.S. App. LEXIS 17931).



John Crane Tells Court Errors In Asbestos Case Led To $3M Punitive Award
PORTLAND, Ore. - Evidentiary and other errors require a new trial in an asbestos case or, at the very least, require reversing a $3 million punitive damages award, John Crane Inc. told an Oregon court on Aug. 28 (Robert G. Sprague Jr., et al. v. A.W. Chesterton Co., et al., No. 15CV14771, Oregon Cir., Multnomah Co.).