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No more prepack asbestos bankruptcies?



We and others (above all Prof. Lester Brickman) have been consistently critical of the gamesmanship and power plays involved in the "prepackaged" bankruptcies of various companies sued in asbestos litigation, in which asbestos plaintiff's lawyers have sometimes effectively seized control of the bankruptcy process (in cooperation with current management) to frustrate the legitimate interests of non-asbestos creditors and insurers. Now New Jersey bankruptcy judge Kathryn Ferguson has dismissed the attempted prepack of the Congoleum Corporation, a flooring manufacturer, in what American Lawyer's David Bario calls a "feisty" ruling (PDF) that could discourage such attempts in future. Check out Bario's article for reminders of the far from attractive conduct of (among others) Joe Rice of Motley Rice and Perry Weitz of the Sheldon Silver law firm, Weitz & Luxenberg.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.