Bestwall LLC is a subsidiary of Georgia-Pacific that was formed as part of a bankruptcy filing by Georgia-Pacific, a company that faces significant mesothelioma and asbestos liabilities. It was one of the first uses of a controversial bankruptcy strategy called a Texas Two Step that allows companies that are fiscally sound to assign their liabilities to another and then have that company declare financial distress. The formation of Bestwall is being challenged by asbestos claimants, who have asked the Fourth Circuit to dismiss the bankruptcy filing.
Asbestos Claimants Point to Faults in Bankruptcy Filing
The objection to the Chapter 11 filing was filed by an official committee representing claimants with outstanding mesothelioma claims and claims pertaining to other asbestos-related diseases against Georgia-Pacific. The company is best known for its paper products, but once manufactured construction materials that were made with asbestos, and the damage caused by those products has led to thousands of personal injury lawsuits.
To avoid facing mesothelioma litigants, Georgia-Pacific created Bestwall and then assigned it all of its asbestos liabilities. Bestwall, in turn, filed for Chapter 11 bankruptcy protection. The asbestos claimants committee argues that because Georgia-Pacific agreed to fund those liabilities when the subsidiary was formed, the company is not truly suffering financial distress and that therefore the bankruptcy laws do not apply to it. The group’s brief said in part, “A corporation with billions of dollars in assets, Bestwall seeks bankruptcy protection on the explicit premise that it remains willing and able to pay its current and future debts in full without difficulty.”
Texas Two Step Used as Defense Against Mesothelioma Claims
Georgia-Pacific was one of the first companies that turned to the Texas Two Step as a mechanism to avoid mesothelioma claims, and others have followed suit, including Johnson & Johnson. The asbestos claimants working to have Bestwall’s Chapter 11 case dismissed first attempted a claim on jurisdictional grounds, and were granted permission to pursue a direct appeal to the Fourth Circuit.
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 resources to help. Contact us today at 1-800-692-8608 to learn more.
