August 17, 2001-Asbestos Plaintiff is Awarded $6.1 Million
The Big Three automakers want to consolidate asbestos-related lawsuits pending against them into the Chapter 11 filing of Federal-Mogul Corp. in a bid to get the claims dismissed due to lack of scientific evidence, according to their attorney.
David Bernick of Kirkland & Ellis said the carmakers will go before visiting U.S. District Judge Alfred Wolin on Feb. 8 and seek to bundle the 15,000 to 20,000 pending asbestos suits against them in state courts and attach them to the bankruptcy of Federal-Mogul, an auto-parts maker.
"We think the transfer of all the cases ought to be done so that one judge with the expertise can address the issue of whether there is any reliable scientific evidence to support the claims," Bernick said.
Wolin is a federal judge in Newark, N.J., who was assigned in December to oversee the asbestos issues in five Chapter 11 cases filed in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.
While similar challenges to the scientific basis of claims were used in Dow Corning's breast implant and Dalkan Shield's IUD-related cases, the attempt to throw out asbestos-related claims by seeking to expose the tenuous scientific basis of the claims is a new approach in asbestos filings, Bernick said.
The pending asbestos claims against the Big Three would revert to state court if Wolin decides they should not be inserted into the Federal-Mogul filing, he said.
The new approach in Federal-Mogul comes as bankrupt Babcock & Wilcox Co. attempts to set up court guidelines for an aggressive challenge to asbestos claims. Bernick is also B&W's counsel.
Judge Sarah Vance in U.S. District Court in New Orleans gave the two committees for both pending and for future asbestos-related claims in the B&W case until Feb. 8 to submit briefs to clarify their position, Bernick said.
Vance then gave B&W until Feb. 22 to respond to the briefs by the claimants committees, he said.
Judge Jerry Brown in the U.S. Bankruptcy Court in New Orleans also said he would issue a decision Feb. 8 on a motion by asbestos claimants on whether B&W was insolvent when it passed assets to parent McDermott International Inc. and thus engaged in fraudulent conveyance.
Bernick has countered that B&W was solvent when the transfer of assets was made 15 months before the company's Chapter 11 filing Feb. 22, 2000. He argued that those assets shouldn't then be folded back into the B&W estate.
B&W is seeking to buck the 20-year tide of debtor failure in asbestos filings by challenging the validity of about 200,000 pending claims in federal court before they are inserted as part of its Chapter 11 reorganization.
More than 30 debtors with asbestos-related claims have routinely turned their assets over to a majority owning trust rather than digging in to fight it out on a costly, case-by-case claims basis.
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