Over the last 50 years, America’s asbestos companies have been forced to take responsibility for claims from mesothelioma victims, as well as those sickened by asbestos-related lung cancer, and other illnesses. After paying billions for the pain caused by their negligent management of the toxic material, some companies have adopted a controversial bankruptcy strategy meant to protect them from facing any more significant jury verdicts. Though victims have fought this maneuver in court, this week the U.S. Supreme Court refused to review the lower court decisions that allowed one of these companies to succeed in evading liability.
Mesothelioma Victims Disappointed as Court Allows Georgia-Pacific’s Subsidiary Chapter 11 to Stand
Facing mass tort litigation filed by mesothelioma and asbestos-related disease plaintiffs, Georgia-Pacific established a subsidiary called Bestwall to hold its asbestos liabilities and then filed for Chapter 11 bankruptcy protection to reduce the amount that they would have to pay for their negligence. This procedure is known as a Texas Two Step, and has been decried by victims, advocates, U.S. senators, and others.
Though attorneys representing mesothelioma victims petitioned the Supreme Court to review a Fourth Circuit split decision that upheld a bankruptcy court extending Bestwall’s stay of litigation to its parent company Georgia Pacific, the Supreme Court refused to hear the case, allowing the stay to remain in place.
Mesothelioma Advocates Predict that Other Companies Will Follow Georgia-Pacific’s Example
People who have been exposed to asbestos are at risk for malignant mesothelioma and other asbestos-related diseases, and that is what the Georgia-Pacific mass tort litigation is focused on: Victims accuse the company of negligently exposing them to asbestos and causing their illness. The apparent success of the use of the Texas Two Step in helping the company avoid having to pay victims what they deserve is causing alarm among those representing these victims.
One advocate for mesothelioma victims summed up the issue, saying, “The decision … provides a roadmap for solvent companies to continue abusing bankruptcy through the same jurisdiction-creating contrivance Georgia-Pacific invented here. Without this court’s review, the Fourth Circuit will become even more of a haven for ‘manipulation of the Bankruptcy Code’ by ‘solvent business corporations’ seeking ‘shelter from sweeping tort litigation without having to file for bankruptcy themselves.’”
If you or someone you love has been diagnosed with mesothelioma or another asbestos-related disease, the Patient Advocates at Mesothelioma.net can provide you with helpful resources. Contact us today at 1-800-692-8608.
