CHARLOTTE, N.C. (Legal Newsline) – Asbestos lawyers assert in bankruptcy court that if a CertainTeed entity gains court approval to see their records of settlements, they’ll need approval to see settlement records of defense counsel.
They want bankruptcy Judge Craig Whitley to grant them access to defense records in the event that he grants debtor DBMP access to their records.
DBMP claims some plaintiffs inflated settlements by alleging one set of exposures in civil court and another in private bankruptcy trusts.
Last year, DBMP moved to estimate future settlements by discounting the value of past settlements to account for double recoveries.
Local counsel for asbestos lawyers opposed the motion but filed a conditional motion for reciprocal discovery in June.
Bankruptcy lawyers from Wilmington, Del. challenged the estimation theory on behalf of claimants at a hearing on Oct. 21.
For a committee of current claimants, Natalie Ramsey said production of records would be unduly burdensome and the records would be irrelevant.
She said CertainTeed knew about the trusts. She said it settled 60 to 80 percent of its cases in groups.
She said it didn’t change its settlement ways after Garlock.
In the bankruptcy of Garlock Sealing Technologies, a sample of cases turned up enough double recoveries to bring about settlement.
Ramsey said CertainTeed settled or litigated about 300,000 suits in 10 years, and paid about $1.5 billion.
She said about 60,000 claims were pending, and about 32,700 were active.
For future claimants, Sharon Zieg of Wilmington attacked the restructuring that split CertainTeed into New CT and DBMP.
She said the debtor has no employees and no business to reorganize.
“The debtor does not need relief,” she said. “They’re here because they want relief.”
She said the scope of a bankruptcy examination is not limitless.
She said the only question is whether the future claimant representative and 75 percent of active claimants approve reorganization.
She said DBMP would relitigate 9,000 claims it already resolved.
She said the fact that it might have offered less to settle doesn’t mean the plaintiff would have accepted.
Whitley took access motions of both sides under advisement.
In the conditional motion of the plaintiff committee, Glenn Thompson of Charlotte claimed DBMP sought to accuse long dead victims of impropriety.
He wrote that if Whitley permitted DBMP’s discovery, the plaintiff committee would be required to develop an accurate picture of actual experience.
“Settlements between an asbestos plaintiff and CertainTeed involved a decision by two parties to resolve litigation for an established sum,” Thompson wrote.
“If the parties are to engage in an investigation of the past with the benefit of hindsight, then the committee seeks discovery to determine what CertainTeed knew or may or should have known when it settled.”