Garlock: Hodges won't reopen estimation proceeding

By Heather Isringhausen Gvillo | Dec 4, 2014

CHARLOTTE, N.C. (Legal Newsline) – On Thursday, Bankruptcy Judge George Hodges refused to reopen the estimation proceeding in the Garlock Sealing Technologies bankruptcy case, denying a motion filed by the Official Committee of Asbestos Personal Injury Claimants that challenged his original $125 million ruling.  

During the hearing, which lasted well into the afternoon, Hodges concluded that based on the Federal Rules of Procedure, there had to be some misconduct to justify reopening the court proceeding, according to NPR.

He found that there was no such misconduct and said the movants did not convince him that the outcome of the estimation proceeding would be any different by re-opening the record, according to NPR.

The ACC sought to reopen the estimation proceeding claiming the debtors in the Garlock bankruptcy case – which include Garlock, Garrison Litigation Management Group and The Anchor Packing Company – committed fraud upon the court when they allegedly failed to present a full picture.

“The Committee has discovered through its own outside efforts that Garlock has violated this court’s orders to produce documents to the Committee, and that these violations permitted Garlock to present false testimony to the court at the estimation hearing – false testimony the court incorporated into its findings,” the ACC stated in its memorandum.

However, the debtors argued in their response to the motion that the substance in the ACC's motion “is remarkably thin,” as it does not address much of the “fundamental bases of the court’s estimation opinion.”

According to the Jan. 10 opinion, Hodges ruled in favor of Garlock, ordering the gasket manufacturer to put $125 million in its bankruptcy trust, which is roughly $1 billion less than what plaintiffs' attorneys requested as Garlock’s liability.

Hodges found that the amount of previous awards and settlements paid by the company in the civil justice system were not reliable because plaintiffs' attorneys had withheld evidence of their clients' exposure to asbestos-containing products manufactured by other companies in order to maximize recovery against Garlock.

The debtors argued that the committee’s motion fails to actually challenge any of Hodges’ findings.

After three-and-a-half years litigating the bankruptcy case, reopening the estimation proceeding would have halted the plan confirmation process, the debtors explained.

“None of this is warranted by a motion that does not bother to mention the fundamental foundations of the court’s opinion and casts no doubt on the few findings it does challenge,” they stated.

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com


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