A cancer patient on Friday asked a U.S. bankruptcy court to dismiss the long-running bankruptcy of a Georgia-Pacific subsidiary, arguing that [ this Bestwall bankruptcy ] serves no purpose other than to prevent asbestos-related lawsuits from proceeding in other courts.
The [ Bestwall bankruptcy ] case began in 2017, when Georgia-Pacific, a unit of industrial conglomerate Koch Industries, spun off its liabilities for asbestos litigation into a new company, Bestwall, which then filed for bankruptcy. Wilson Buckingham, who was diagnosed with mesothelioma in 2020 and who sued Georgia-Pacific, was one of thousands of plaintiffs whose lawsuits was blocked by the move.
Buckingham’s attorneys argued Friday that the Bestwall bankruptcy should face the same fate as the bankruptcy of a Johnson & Johnson-created subsidiary, which an appeals court dismissed last month.
In his court filing, the first to challenge Georgia-Pacific in the wake of the J&J JNJ.N unit’s bankruptcy dismissal, Buckingham alleged that Bestwall’s bankruptcy used a “nearly identical” strategy, known as the “Texas two-step.”
J&J had created the subsidiary, LTL Management, to absorb liabilities for lawsuits alleging that its baby powder and other talc products caused cancer. LTL immediately filed for Chapter 11.
The U.S. Third Circuit Court of Appeals in Philadelphia found that neither J&J nor LTL were in “financial distress” at the time of the LTL bankruptcy filing….
Asbestos claimants previously tried to dismiss the Bestwall bankruptcy, but U.S. Bankruptcy Judge Laura Beyer denied that request in July 2019. The official committee appointed to represent asbestos claimants has appealed that decision.
In his court filing, Buckingham argued that the Third Circuit’s ruling on “financial distress” was particularly relevant to Bestwall, because Georgia-Pacific was able to pay in dividends to its parent company Koch Industries last year, according to Buckingham’s motion.
The Third Circuit ruling does not apply to courts in North Carolina, where the Bestwall case is proceeding. But Buckingham argued that the recent ruling, combined with the lack of progress in the Bestwall case, require the bankruptcy court to consider dismissal with “fresh eyes.”[Article continues at original source]
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