WILMINGTON, Del. (Legal Newsline) - Nearly a year after a judge estimated the $1.1 billion bankruptcy liability for two companies that formerly manufactured asbestos-containing products, Specialty Products Holding Corp. has requested the Delaware Bankruptcy Court to approve a deadline notice plan.
In its motion, Specialty Products argues that the Notice Plan will "provide fair, adequate, and effective notice to holders and potential holders of asbestos personal injury claims against the debtors."
In her May 20 memorandum opinion, U.S. Bankruptcy Judge Judith Fitzgerald's estimated liabilities for Specialty Products and related entity Bondex International were several millions of dollars larger than what the debtors argued was proper.
The two companies, which specialized in manufacturing joint compound for do-it-yourself construction work at home, were required to place $1.1 billion for current and future mesothelioma claims and $66 million for current and future lung cancer claims into an asbestos bankruptcy trust for claimants to receive their compensation.
Specialty Products filed its voluntary petition for relief under chapter 11 bankruptcy on May 31, 2010.
Then on Sep. 26, 2013, the Official Committee of Asbestos Personal Injury Claimants (ACC) teamed with attorney Eric D. Green, representative for future asbestos claimants in these cases, by filing a joint emergency motion requesting an order which would:
-Fix bar dates for the filings of proofs of claim for pre-petition non-asbestos claims against Specialty Products;
-Approve bar dates notice and mailing procedures; and
-Grant certain supplemental relief
According to their motion, the ACC and Green sought to establish a bar date for non-asbestos unsecured claims against Specialty Products and to provide only mail notice, and no publication notice, of the bar date to holders of known non-asbestos claims against Specialty Products.
However, nearly a month later, Specialty Products filed an objection to the joint emergency bar date motion and a cross motion requesting additional bar dates and related relief, indicating that it did not oppose the establishment of a bar date for non-asbestos unsecured creditors but merely wanted the court to also set a bar date for unsecured creditors of Bondex and extend the respective bar dates to include asbestos claimants of each of both companies.
The court ultimately ruled that it would establish a bar date for all claims, including asbestos personal injury claims. However, at a Feb. 5 hearing, the ACC objected to the alleged inadequacy of the asbestos publication notice.
The ACC brought in Katherine Kinsella of Kinsella Media to testify on the inadequacies. She stated that the scope of the proposed publication notice "was deficient because it would assuredly reach only about half of the target audience and the proposed form of notice was inadequate because it was 'written in legal terminology that require[s] about three years of education beyond high school' to understand," the Thursday motion for approval states.
Following the hearing, the parties met with Kinsella to develop a notice plan, but the cost would have exceeded the $50,000 proposed fee stated at the hearing.
As a result, Specialty Products chose to solicit proposals from other firms with similar expertise, receiving bids from five other consultants.
After consideration, Specialty Products chose to retain The Garden City Group, Inc. (GCG) as claims notice consultant, which was approved by the court.
GCG was able to reach a sufficient notice plan based on Specialty Products' asbestos-containing products, the manufacture and sale of those products by Specialty Products and The Reardon Company, the location of the manufacturing facilities and the company's asbestos litigation and corporate histories.
"The Notice Plan is targeted to reach persons most likely to allege exposure to asbestos-containing products manufactured or sold by [Specialty Products] or Reardon," the motion states.
The primary targeting audience proposed in The Notice Plan included the population of men 55 years of age or older, which was selected based on demographics used in other court-approved asbestos-related notice programs and time periods during which Specialty Products and Reardon included asbestos in their products.
A second target audience included adults 45 years of age or older and includes all men and women who may have some recollection of the use of Bondex products in the late 1970s when Bondex discontinued manufacturing and selling asbestos-containing products.
As for publication notice, GCG and Specialty Products worked on a version of the bar date notice that was written in "plain" language, which is expected be easily understandable by everyone in the target audience.
The publication notice communicates important information about who must file a claim, examples of types and common usages of Specialty Products asbestos-containing products, and the deadlines and procedures to file a claim in an understandable way.
In order to get the simplified publication message out, the Notice Plan provides guidelines as to how GCG and Specialty Products would advertise.
The Notice Plan concentrates primarily on television and print media, including 30-second commercials on local affiliates in every one of the 210 television markets in the U.S.
The print media campaign includes publication in English, Spanish and French in print media in the US, Puerto Rico, Canada and Mexico in magazines, newspapers and asbestos and legal publications.
"The Notice Plan also includes an Internet component to further enhance its reach to unknown asbestos claimants," the motion states.
The Internet campaign is expected to include banner advertisements, Facebook ads and sponsored ads triggered by specific Google searches.
Advertisements will also include press releases broadly distributed in the U.S., Canada, Mexico and the Caribbean and Pacific islands as well as third-party mail outreach to 10 associations in which claimants are likely to be members.
As for current pending cases, Specialty Products plans to mail a notice package including a bar date notice tailored for asbestos personal injury claimants and a proof of claim form to counsels for all readily identifiable claimants, which consists of about 450 law firms.
The Notice Plan is expected to extend over a nine-week period, beginning about four weeks after an order establishing a bar date is entered, and will cost approximately $3.2 million.
The motion states that the Notice Plan is designed to reach 90 percent of men 55 years old or older with an average frequency of 3.7 times and 84 percent of adults 45 years old or older with an average frequency of 3.7 times.
"Reach refers to the estimated percentage of the unduplicated audience exposed to the notice," the motion continued. "Frequency, in contrast, refers to how many times, on average, the target audience had the opportunity to view the notice.
"The reach and frequency of the Notice Plan is substantial, particularly considering the Notice Plan's broad target audiences. In class action cases, it is widely accepted that a projected reach of approximately 75 percent provides effective notice."
From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com
Bondex requests approval of deadline notice plan in bankruptcy proceedings
