Legal Newsline

Wednesday, November 20, 2019

Garlock testimony switches to financial liability

By T.K. Kim | Aug 3, 2013


CHARLOTTE, N.C. (Legal Newsline) -- Attorneys transitioned Friday from days of expert testimony on the carcinogenic effects of asbestos and the work practices of attorneys representing asbestos plaintiffs to arguments about how much financial liability Garlock Sealing Technologies should face in the company's ongoing bankruptcy trial.

Garlock attorneys called on economists to give the court estimates for how much money the company should place in a trust for future mesothelioma victims who might sue the company over exposure to asbestos from their products. Doing so will allow the company to escape bankruptcy.

Charles Bates, chairman of the economic consulting firm Bates White LLC and former assistant professor in the economics department at Johns Hopkins University testified about an estimation report his firm created to assess how much Garlock should put in the trust to compensate valid claimants.

Bates estimated $25 million was the net present value enough to sufficiently cover payouts for pending asbestos claims with $100 million being the net present value to cover claims by future mesothelioma victims. He said he arrived at that figure by taking into account factors such as the estimated number of future claimants. He said he used an epidemiological model to estimate how many more mesothelioma claims are likely to arise. Bates said Garlock's proposal to fund the trust with $270 million would be sufficient to satisfy all of the future and pending claims.

Bates' testimony followed two days of mostly closed testimony by former Garlock attorney John Turlik, currently a partner in the firm Segal, McCambridge Singer & Mahoney. Turlik spoke about legal strategies and the practices of some plaintiffs' lawyers.

On Wednesday, Judge George Hodges denied a Legal Newsline motion to keep Turlik's testimony open and to unseal closed portions of testimony given by a law professor last week. In a written order explaining his decision, Hodges stated several factors including the circumstances of certain asbestos plaintiffs' cases, plaintiffs' particular exposures, "how the law firms responded to discovery, the questions they asked their clients in so responding, and how the law firms approached settlement negotiations," amounted to "trade secrets, confidential business information, and attorney-client privileged information about which the parties involved have significant privacy rights. The court has concluded that those rights outweigh the public's interest in those matters."

Attorneys for Legal Newsline are preparing to seek review of the judge's decision.

The bankruptcy trial, which began last week at the U.S. Bankruptcy Court for the Western District of North Carolina and is expected to last three weeks, will determine the estimated liability of the company for current and future asbestos claims. One of the central questions that will help establish how much Garlock will owe the claimants revolves around whether Garlock products, many removed decades ago, and no other sources of asbestos, led to cases of mesothelioma.

To try and limit the company's liability, its attorneys are asserting that some plaintiffs, taking advantage of confidentiality provisions enacted for special trusts established to pay claimants who came into contact with asbestos, are using the provisions to allow them to sue multiple defendants while using the same argument that each respectively was the cause of their illness.

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