Results matching “bankrupt asbestos”

New from the Washington Legal Foundation - PointOfLaw Forum

Today, our friends at the Washington Legal Foundation are releasing five new papers, each focusing on a distinct civil justice issue or court ruling. The papers can be accessed from WLF�s website here. Of particular note is a paper analyzing the Michigan Supreme Court�s July 13 ruling rejecting medical monitoring as a remedy, written by our sometimes-guest-blogger Leah Lorber of Shook, Hardy & Bacon (for more on the Michigan medical monitoring case, see Walter's and my earlier posts). The other four papers focus on the timely topics of class action litigation and reform at the federal and state levels; the use of consumer protection laws to sue food companies and restaurants; and the abuse of the bankruptcy process by asbestos lawyers. These papers are short, accessible, and highly informative; I encourage all our readers to give them a look.

A New York Times article seems to indicate so:

Recently filed court documents show that federal prosecutors in Manhattan may have begun to investigate the conduct of three law firms.

The documents - which surfaced in the bankruptcy case of G-1 Holdings, formerly the GAF Corporation, a manufacturer of roofing material - show that lawyers for G-1 have met with prosecutors from the United States attorney's office in Manhattan in recent months. The documents also show that the company's lawyers have turned over records of extensive interviews with former employees of the three plaintiffs' firms in which some employees described coaching potential claimants and noted efforts to influence doctors' diagnoses.

Two of the firms are Baron & Budd and Ness Motley, who we've had occasion to criticize in the past; our editor previously wrote about an earlier Baron & Budd asbestos scandal that sounds similar to this one. (Jonathan D. Glater, "Lawyers Challenged on Asbestos", NY Times, Jul. 20 (via Kirkendall)).

More on Michigan medical monitoring decision - PointOfLaw Forum

The full text of the opinion is here (PDF). The amicus brief prepared in part by Leah Lorber's firm, on behalf of the American Tort Reform Association, U.S. Chamber of Commerce, National Association of Manufacturers, American Chemistry Council, and the Coalition of Litigation Justice, Inc., is here (PDF). Leah also points us to three articles written by her and her Shook Hardy colleagues, all cited in the decision:

Construction supply, Esq. - PointOfLaw Forum

From last week's WSJ editorial ("Leahy's Legal ATM" - $), describing the consequences of the asbestos-bankruptcy train wreck (see Jul. 21 and Aug. 3, 2004):

"If nothing is done," explains one business source, "the plaintiffs lawyers will own the world's largest wall board company in USG, the world's largest insulation company in Owens Corning, the world's largest ceiling and floors company in Armstrong, and the world's largest roofing company in GAF. It's like a hostile takeover by the asbestos trial bar of the construction industry. And tort reform is not going to fix that problem because these cases are already in the system."

"Learning from Asbestos Lawsuits" - PointOfLaw Forum

AEI has a panel discussion slated for Thurs., Apr. 21 in Washington. "Anup Malani, associate professor of law at the University of Virginia, and Charles H. Mullin, an economist at Bates White, will present their recent study on liability in asbestos-related lawsuits. ...Malani and Mullin estimate that this insurance system for plaintiffs adds twenty-three to sixty-six cents in bankruptcy costs for every dollar awarded in compensation." Commenting will be AEI's John Calfee and Duke's Francis McGovern. Update: video of event is here.

WSJ asbestos editorial - PointOfLaw Forum

Opines this morning's Journal ($): "A group of commercial creditors -- who stand to lose if the trial bar and healthy plaintiffs gobble up every last corporate asset -- are waging a principled battle against asbestos shenanigans, and have made some headway." In particular, the "creditor banks have asked that he [Judge John P. Fullam, recently appointed to oversee several asbestos bankruptcies] order a look at a random sample of the medical records of those plaintiffs with non-malignant (non-cancerous) claims against Owens Corning. These are the vast majority of asbestos claims -- and the most suspect." Plaintiff's firms are fighting the request; critics contend that a closer look at medical files will reveal a majority to be medically ineligible.

Houston Chronicle on asbestos - PointOfLaw Forum

A lengthy article in the Houston Chronicle last week described asbestos litigation as "the biggest legal mess in American history." Seventy-three companies have been forced into bankruptcy as a result, with others "sure to join them." A legislative resolution of the crisis remains elusive:

The U.S. Supreme Court, referring to the "elephantine mass" of asbestos lawsuits, has repeatedly called on Congress to come up with a way of compensating victims outside the court system. Legislation has been proposed and debated for years without resolution, but both Congress and the Texas Legislature are grappling with it anew as asbestos grows into a major political issue.

Washington is focused on a proposed national trust fund. Recent progress in Senate negotiations has encouraged its supporters. In Austin, the Legislature is expected to tackle competing bills that would restrict the filing of asbestos lawsuits to people already suffering from related illnesses. One of the proposals in Texas also would allow asbestos victims who are not sick now to sue once symptoms appear.

No one has a firm grasp on the ultimate price tag for all the asbestos compensation and legal expenses. Experts now peg the total U.S. asbestos liability at $200 billion to $265 billion.

Professor Lester Brickman, a frequent contributor to Point of Law, is quoted in the article.

(Mike Tolson, "Asbestos lawsuits create U.S. legal crisis," Houston Chronicle, Oct. 3)

Asbestos: Illinois's "Lipke rule" - PointOfLaw Forum

Continuing our summary of highlights from the St. Louis Post-Dispatch's excellent recent coverage of asbestos litigation (see our earlier posts here and here): one of the articles in the series (Paul Hampel, "'Lipke rule' is unfair to defendants, many argue", Sept. 19) discusses Illinois's unusual "Lipke rule", named for the plaintiff in a 1987 case, which is powerfully effective in extracting money from defendants. (It is applied in many lower courts, but has never been ruled on by the Illinois Supreme Court.)

Because of Lipke, if only one of 100 defendants in an asbestos case forced a trial, while the other 99 settled, a judge could bar the last defendant from suggesting at trial that one of the other 99 caused the plaintiff's illness...."One reason the Lipke rule is so destructive is that most of the corporations that were most responsible for harming workers in America because of asbestos products are bankrupt - like Johns Manville," said an attorney whose client is frequently named as a defendant in mesothelioma suits.

"Say if the plaintiff worked at the Navy docks and was exposed to Johns Manville products for 30 years. He is - quite frankly - coached by trial lawyers to testify that he once did a home improvement job in his basement using a joint compound purchased at a hardware store.

"So this guy worked a few days in his basement with the joint compound. He worked for 30 years on the docks. But the jury only gets to hear about the joint compound."

The series also includes a "Glossary of terms involving asbestos suits".

Asbestos: Pfizer's Quigley bankrupt - PointOfLaw Forum

Latest in the endless succession: the Pfizer Corp.'s Quigley Co. subsidiary, which once made coatings for steelmaking equipment, filed for bankruptcy protection in federal court in Manhattan. As part of a deal, Pfizer "agreed to contribute $405 million over 40 years to a trust that will pay remaining and future claims against Quigley"; the parent company has been named in some of the 171,611 lawsuits against its subsidiary claiming injury from asbestos, silica or mixed dust. (Bloomberg; AP; Reuters; The Deal). According to Bloomberg, "Pfizer continues to face about 139,100 claims against American Optical Corp., a business Warner-Lambert bought in 1967 and sold in 1982. Pfizer inherited the liabilities when it acquired Warner-Lambert in June 2000. The unit made respiratory devices and safety clothing to shield against asbestos exposure." Those liabilities have so far been covered by insurance.

Meanwhile, Roger Parloff has a must-read article in the latest Fortune (subscriber-only, alas) on the "scandal" of prepackaged asbestos bankruptcies, also much explored in this space (see Aug. 3 and our asbestos page generally). It should be noted that early news reports on the Quigley bankruptcy do not indicate whether or not it shares some of the aspects of prepacks often considered most objectionable, such as side payments to the organizing plaintiff's lawyers, unfavorable treatment for claimants with the most severe ailments, and carve-ups of insurance proceeds that make it hard for insurers to contest liabilities.

Bankruptcy Judge Puts Brakes on Asbestos Claims - legal news

Asbestos bankruptcy coverage - PointOfLaw Forum

More coverage, this time in the insurance trade press, of that House Judiciary Committee hearing last month (see Jul. 21) in which our friend Prof. Lester Brickman of Cardozo Law School explained in detail how "pre-packaged" bankruptcies permit some plaintiff's lawyers to conspire with asbestos-company managements against the interest of both truly sick claimants and insurance companies ("U.S. Probes 'Pre-Pack' Scandal", Insurance Day, Jul. 23).

The steps in the process: 1) under 1994 revisions to federal bankruptcy law, a bloc representing 75 percent of claimants can seize control of a bankruptcy, even if its claims are not the largest or strongest; 2) lawyers representing large numbers of unimpaired asbestos claimants are thus in a good position to seize control of such bankruptcies; 3) these lawyers negotiate with incumbent managers to strike deals which leave the managers in control of most operating assets in exchange for giving the lawyers a claim against insurance coverage and guaranteeing high payments to the lawyers' unimpaired clients; 4) the gains from rigging the process in this way come at the expense of nonasbestos creditors of the bankrupt companies, seriously ill asbestos claimants, and insurers.

Rebuked asbestos judge joins asbestos advisory firm - PointOfLaw Forum

Back in June -- before our site was launched to the public -- I wrote about the Third Circuit's disqualification of Senior District Judge Alfred M. Wolin from presiding over 3 of 5 consolidated asbestos bankruptcy proceedings, for Owens Corning, W.R. Grace, and USG Corp. As I noted then:

"A writ of mandamus to disqualify a judge is an extraordinary remedy, only granted when the reviewing court finds 'clear and indisputable evidence' that a 'reasonable person' would conclude that a judge's impartiality is in question.

"In this case, the court determined that Judge Wolin abused his discretion by relying on a five-member 'Council of Advisors' with whom he consulted about the case. The court ruled that two of the five advisors had a clear conflict of interest in that they also served as class counsel for asbestos plaintiffs on parallel but unrelated asbestos bankruptcy proceedings."

Judge Wolin subsequently retired from the bench.

This Wednesday, in a disheartening but hardly shocking turn of events, the retired judge announced that he would join the Newark law firm Saiber Schlesinger Satz & Goldstein, where his son also works. The firm was one of the "advisors" Judge Wolin brought in to help him with the asbestos bankruptcy cases. Readers are left to form their own conclusions...

Lester Brickman's testimony today on asbestos litigation - PointOfLaw Forum

Today, Point of Law contributor and Cardozo Law School professor Lester Brickman testified before the House Judiciary Committee Subcommittee on Commercial and Administrative Law on asbestos bankruptcy reorganizations. His written testimony, "Administration and Large Bankruptcy Reorganizations: Has Competition for Big Cases Corrupted the Bankruptcy System?" can be found in its entirety here.

The short answer to his titular question? Yes. Those desiring a more thorough summary of the asbestos litigation scams should consult Professor Brickman's more recent law review article on the subject, On the Theory Class's Theories of Asbestos Litigation: The Disconnect Between Scholarship and Reality.

Asbestos suits: a small business problem, too - PointOfLaw Forum

Much coverage of the asbestos debacle has focused on the collapse of very large firms such as Owens-Corning, Babcock & Wilcox, Armstrong World Industries and so on. However, many small firms without particularly deep pockets get entangled too. In Gulfport, Miss., it was reported last year that 40-employee Phillips Building Supply "is a defendant in more than 39 lawsuits" over asbestos, silica and allegedly not-protective-enough face masks. "Bill Hough, president of Phillips, said trial lawyers sued his company along with [bigger] corporations simply to keep the cases in state courts, which have been more apt to award large monetary verdicts than federal courts." (Tom Wilemon, "Small businesses in lawsuit crossfire", Biloxi Sun-Herald, Jun. 17, 2003). Among not-so-big manufacturers affected has been Vermont's Rutland Fire Clay Company, maker of fireplace supplies and joint compound, driven to the bankruptcy courts in 1999 after 116 years in business.

Asbestos: goodbye to another insurer - PointOfLaw Forum

The 205-year-old Providence Washington Insurance Companies, the oldest insurance company in New England and third oldest in the United States, has announced that it will cease operations after "running off" its current obligations (paying claims on them as they mature). Though the company withstood the Civil War, 1929 stock market crash and any number of hurricanes, fires and earthquakes, it could not quite withstand the unpredictable nature of the present-day litigation system: "A.M. Best attributed the insurer's decline partly to losses from asbestos claims on businesses insured in the 1960s through 1980s." ("After 205 Years, R.I.-Based Providence Washington to Close Its Doors", Insurance Journal, Jun. 1)(via Martin Grace, who suggests that reckonings of the industrial damage done by the asbestos litigation -- as with the oft-seen lists of manufacturer bankruptcies -- ought to include the damage done to the insurance sector of the economy as well).

Asbestos Bankruptcies Face Setbacks on Two Fronts - legal news

Wall Street Journal highlights asbestos bankruptcy scams - PointOfLaw Forum

Tuesday's Wall Street Journal ran a lead editorial (subscription required) chronicling the abusive practices that have so corrupted modern asbestos litigation.

The article led with the recent ruling by the Third Circuit Court of Appeals, In re: Kensington, that disqualified Senior District Judge Alfred M. Wolin from presiding over 3 of 5 consolidated asbestos bankruptcy proceedings, for Owens Corning, W.R. Grace, and USG Corp.

Newsweek vs. ATLA: Stuart Taylor, Jr. responds (I) - PointOfLaw Forum

Newsweek, as is typical for a newsweekly, published only a terse editorial response (see previous post) to the litigation lobby's concerted attack on its reporting. However, Stuart Taylor, Jr., the distinguished veteran journalist who (with Evan Thomas) was principal author of the feature, has kindly consented to let us reprint his more detailed point-by-point rebuttal to ATLA's official gripe catalogue, published under the title "Spin or Facts? A Look Behind Newsweek's Series 'Lawsuit Hell'". Because of the length of Taylor's response, we've split it into two posts, the first responding to the first six points of ATLA's critique and the second responding to the rest. Check out in particular, under heading #6, ATLA's false (and remarkably brazen) assertion that the Tillinghast study's $233 billion estimate of the cost of the liability insurance sector includes "the cost of the entire property/casualty insurance industry" and in particular the cost of hurricanes and similar damage. (It doesn't.)
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