Many mesothelioma victims blame their illness on their use of products made by Georgia Pacific and its subsidiary Bestwall-Gypsum. Claims against the company have been stymied by the company’s attempts to use bankruptcy to evade liability for its negligence. Recently, claimants have asked the full Fourth Circuit Court to reconsider a ruling that allowed the company’s asbestos unit, Bestwall, to remain in Chapter 11 bankruptcy despite Georgia Pacific being solvent. The group filed a petition for rehearing, arguing the decision defies U.S. Supreme Court precedent and will allow wealthy debtors to abuse the bankruptcy system to avoid paying claims from victims of asbestos-related diseases.
Mesothelioma Victims Face Delays Following Texas Two-Step Bankruptcy Filing
Mounting mesothelioma liabilities led to Bestwall’s controversial 2017 Chapter 11 filing. It was one of the first asbestos companies to use the so-called Texas two-step bankruptcy strategy, spinning Bestwall off from Georgia-Pacific and then assigning the company’s asbestos liabilities to the new subsidiary, despite having the financial resources to fully pay both its current and anticipated claims. Since 2018, a committee of asbestos claimants has argued that Bestwall was not in financial distress and therefore not eligible for Chapter 11 protection, but U.S. Bankruptcy Judge Laura T. Beyer repeatedly rejected their motions to dismiss.
The mesothelioma claimants’ latest challenge asserts that the case falls outside Judge Beyer’s constitutional jurisdiction because Bestwall isn’t truly bankrupt. In a 2-1 decision issued in early August, the Fourth Circuit panel rejected this appeal, with Judge A. Marvin Quattlebaum stating that Congress granted bankruptcy courts power over all Chapter 11 filings regardless of debtors’ finances. However, Judge Robert B. King dissented, arguing that bankruptcy was historically limited to parties “unable or unwilling to pay their debts” and that, therefore, the court lacks jurisdiction over solvent parties like Bestwall.
Mesothelioma Victims Warn of Dangerous Precedent for Tort Claims
Mesothelioma and personal injury claimants are arguing that the opinion allowing the bankruptcy to move forward creates a dangerous precedent and path for wealthy corporations to evade their asbestos liabilities. The victims’ petition argues that the decision ignores constitutional limits, especially in light of the record showing that Bestwall admitted that it is both willing and able to pay liabilities now and for the foreseeable future.
The victims’ committee contends the ruling allows profitable companies to delay justice for thousands of mesothelioma victims and others facing debilitating diseases, and is deserving of reconsideration by the full appellate court with its complete complement of judges.
If you or someone you love has been diagnosed with mesothelioma, the Patient Advocates at Mesothelioma.net are here to help. Contact us today at 1-800-692-8608 to learn more.
