A talc supplier facing hundreds of asbestos-related claims from mesothelioma victims and others is facing legal pushback in response to its attempt to file for bankruptcy in Texas. Barretts Minerals is based in Montana and has been accused by challengers of “blatant forum shopping” by creditors who are trying to move the filing back to the state where the company primarily does its business.
Barretts Minerals Is Latest Mesothelioma Defendant to Attempt Texas Two-Step
Barretts Minerals is facing more than 550 pending talc lawsuits filed by mesothelioma victims and others who say they were injured by talc contained in products made by companies that Barretts sold talc to. The company had originally been a part of Pfizer, which spun it off in 1992. Barretts then became part of an independent company called Minerals Technology. In July, the company formed Barretts Ventures Texas, a subsidiary that creditors say was formed to create a Texas venue.
Several companies, including Johnson & Johnson, have formed subsidiaries to hold their asbestos and mesothelioma liabilities and then filed for bankruptcy in Texas because of the state’s corporate-friendly bankruptcy laws. Though Barrett has argued that they have long had a presence in the state, its opponents point to the fact that, days before its bankruptcy filing, the company borrowed approximately $6 million at 10% interest to finance the purchase of two real estate plots in the state that are its only assets there.
Judge Questions Lack of Debt in Asbestos Company’s Bankruptcy Claim
In hearing arguments from both the talc company and its creditors, U.S. Bankruptcy Judge Marvin Isgur indicated that he would need more information from both sides before he could decide whether the case should be transferred to Montana. The representative for the future talc claims is supporting the creditors’ argument for keeping the company’s claims in its home state.
One of the judge’s biggest questions is why the affiliate formed to hold asbestos and mesothelioma liabilities is seeking bankruptcy protection if it has no apparent debts. In response, a representative for the unsecured creditors committee said, “I think these facts support bad-faith forum shopping at its worst.”
