AboutMesothelioma.Net

Two Bankruptcy Courts Favor Asbestos Victims' Rights to Pursue Claims

Monday, August 24, 2009

By Wade Rawlins

A federal bankruptcy judge in Florida this month held that a successor company to a business that emerged from bankruptcy must face a lawsuit arising from allegations that products sold by the original business caused a woman’s mesothelioma.

The case concerns Mary Van Brunt, a New York woman who developed mesothelioma in 2006, nearly 30 years after buying home remodeling products containing asbestos that allegedly were sold by Grossman’s Inc. She died from the rare form of asbestos-related cancer in August 2008.

Before her death, she and Gordon Van Brunt filed a products liability lawsuit in state court in Erie County, New York in 2007, contending that she had developed mesothelioma from exposure to products containing asbestos that the Van Brunts had acquired in 1977 during a home remodeling project.

The Van Brunts’ lawsuit named JELD-WEN, and 57 other defendants. JELD-WEN is a manufacturer of building products headquartered in Klamath Falls, Oregon. It acquired Grossman’s, the company alleged to have sold the products containing asbestos to the Van Brunts.

The Van Brunt’s lawsuit has played out in courts in three states. In both Florida and Delaware, they won legal victories that could help those seeking compensation for asbestos-related disease from companies that have been through bankruptcy.

JELD-WEN went to federal bankruptcy court in Delaware and then Florida to try to get the court to block the Van Brunts' lawsuit filed in New York. JELD-WEN contended in its court filings that it was not liable for Mary Van Brunt’s illness because Grossman’s two earlier bankruptcy reorganizations had barred any claims that arose before the date the court confirmed the bankruptcy reorganization.

The issue turned on when Mary Van Brunts’ claims arose: Was it when the Van Brunts bought the home remodeling products or when her illness appeared?

The Van Brunts argued that their legal claims did not arise until the fall of 2006 when Mary Van Brunt began to experience symptoms of mesothelioma, a disease that often appears 30 to 40 years after exposure. Doctors diagnosed her illness in 2007.

The courts in Delaware and Florida agreed with the Van Brunts and refused to bar their lawsuit against JELD-WEN and others.

“Court’s have long recognized the unique nature of asbestos-related illnesses and struggled with how to balance the need to make asbestos victims whole without crippling businesses with asbestos-related liability,” said U.S. Bankruptcy Judge A. Jay Cristol in Florida, agreeing that Van Brunt’s legal claims were not discharged by court’s approval of a bankruptcy reorganization plan for Grossman’s.

Grossman’s Inc. was a subsidiary of Evans Products Co. In 1985, Evans Products Co., filed for bankruptcy in U.S. Bankruptcy Court in the southern district of Florida. The court approved a reorganization plan and when the company re-emerged from bankruptcy in 1986, it took the name, Grossman’s Inc., ones of its subsidiaries.

“If any unknown asbestos injuries manifest themselves after plan confirmation, the debtor or a successor in interest, must deal with them in the ordinary course of business,” Cristol said.

Companies such as JELD-WEN have to balance the risks and benefits of possible legal liability for asbestos claims when deciding whether to buy the assets of companies emerging from bankruptcy, Cristol said.

Cristol’s ruling echoed a decision in bankruptcy court in Delaware a year earlier. The U.S. Bankruptcy Court in Delaware held that the legal precedent established in decisions in the Third Circuit was that a claim for asbestos-related injuries did not arise until the symptoms manifested themselves.

The court said that the counter argument— to require a person who has no idea that he or she has been harmed by a product to file a claim against a company involved in bankruptcy proceeding —was absurd.

In 1997, Grossman’s had filed for bankruptcy protection in U.S. Bankruptcy Court in Delaware. The court approved its reorganization plan in December 1997. JELD-WEN acquired a majority interest in Grossman’s stock and eventually merged the companies in 1999 under the name JELD-WEN.

##

Labels: Featured News

posted by Wade Rawlins at 12:11 PM
Link to this article