Despite opposition from mesothelioma and asbestos injury claimants, a U.S. bankruptcy judge has granted recognition of Canadian company Asbestos Corp. Ltd.’s bankruptcy filing. The victims of exposure to the Quebec asbestos mining company’s products argued that allowing the foreign case to move forward would deprive them of due process and a fair hearing. The company and its insurers are currently facing claims from thousands of U.S. citizens.
Mesothelioma Victims Argue Canadian Bankruptcy Circumvents U.S. Laws and Asbestos Protections
Though personal-injury claimants with mesothelioma argued that recognizing the Canadian bankruptcy would circumvent U.S. laws, Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan ruled that the company’s ongoing bankruptcy and restructuring process should be recognized in the U.S. Asbestos Corporation Ltd. (ACL) filed for the Canadian equivalent of Chapter 11 in May after having faced thousands of asbestos-related personal-injury lawsuits in the U.S. The decision provides bankruptcy protection for ACL, its former indirect parent company, General Dynamics, as well as the insurance companies whose policies are the main source of funding for asbestos claims against them.
Attorneys for the mesothelioma and asbestos claimants call ACL’s use of Chapter 15 unprecedented, saying it was “initiated and funded by insurance companies to protect themselves from paying contract benefits for liability in U.S. courts where every identified claimant is a U.S. citizen.” The lawyers argued that the goal of ACL’s Canadian bankruptcy is evasion of asbestos-specific protections required by U.S. Congress. Unfortunately, the judge said that the question before him was simply to determine whether he should recognize the Canadian proceeding. He noted that the asbestos company would still have to seek the U.S. court’s approval to implement its Canadian restructuring plan.
ACL’s Failure to Appear Led to Default Judgments for Mesothelioma Victims
ACL has a history of failing to defend itself in U.S. courts, resulting in substantial default judgments for mesothelioma victims who have pursued justice from the company. By seeking Canadian bankruptcy protection and U.S. recognition through Chapter 15, ACL aims to halt thousands of outstanding claims in which victims have already proven their cases or would likely prevail at trial. The move effectively uses foreign bankruptcy proceedings to avoid accountability for decades of selling asbestos that caused deadly cancers.
ACL stopped mining asbestos in the 1980s, but it is still extracting minerals from waste materials in the mines. Its operations have been blamed for exposing thousands of workers and consumers to fibers that caused mesothelioma, lung cancer, and other asbestos-related diseases.
If you or someone you love has been diagnosed with mesothelioma or another asbestos-related disease, the Patient Advocates at Mesothelioma.net are here to help. Contact us today at 1-800-692-8608 to learn more.
