A frequent target of asbestos lawyers is seeking access to the ballots cast by holders of asbestos claims against one of the many companies forced into bankruptcy by the long-running litigation.
Honeywell International has interjected itself into the bankruptcy proceeding of the successors to Chicago Fire Brick and Wellsville Fire Brick, companies that spent a decade creating a trust that would pay individuals with asbestos claims. On May 3, Honeywell asked the federal bankruptcy court in Oakland, Calif., to make those ballots public.
Those holding claims against companies are asked to vote on proposed bankruptcy plans. Objecting to Honeywell's request is the trustee of CFB’s trust and the Pittsburgh asbestos firm Goldberg, Persky & White.
“This court’s local rules required the Plan Proponents to file ‘all ballots,’” Honeywell’s attorneys wrote. “Yet the Plan Proponents failed to do so and have refused to provide copies of the ballots to Honeywell.
“The Plan Proponents’ refusal is unwarranted not only in light of this Court’s local rules, but also because the ballots are matters of public record under Bankruptcy Code…”
CFB and WFB once made some products used in high-temperature furnaces that contained asbestos and filed for Chapter 11 protection in 2001. The company’s successors, CFB Liquidating Corp. and WFB Liquidating Corp., faced more than 20,000 asbestos claims and created a trust to pay them. As of October 2015, there were roughly 29,000 claims asserted against the trust.
Only a report that summarized the results of the voting by those who had claims against CFB was produced. Honeywell wants to see the individual ballots.
It cites comments made by Judge George Hodges during a hearing in 2012. Hodges oversaw the bankruptcy of Garlock Sealing Technologies and famously ruled in 2014 that asbestos attorneys had been manipulating the system to maximize recovery against the company in the past.
“It seems to me that these [ballots] are public records even in the hands of agents. They are ballots cast in a bankruptcy case. We use agents,” he said.
“Other courts use agents just because we don’t have the staff to do it ourselves, but they are deputies and agents of the court, and I think these are public records.”
Hodges later wrote that ballots are public records in a 2012 order. In 2014, after Garlock was allowed access to trust claims information submitted by a small number of plaintiffs who had also sued the company, Hodges decided that plaintiffs and their attorneys were giving one story about how they were exposed to asbestos in the trust system while telling another story in their lawsuits against Garlock and others.
Presumably, if Honeywell were allowed to see who has a claim against CFB by having access to their ballots, it could check its own litigation history for the same.
Also cited by Honeywell is former Judge Judith Fitzgerald, who had made a similar decision prior to Hodges’. Her decision, though, was reversed by a Delaware bankruptcy judge.
Honeywell is similarly seeking information on the asbestos claimants in that proceeding, too.
The trustee of the CFB trust, Barry Chatz, filed his objection on May 24, calling Honeywell’s motion “curious.” He noted that the company didn’t make its request until five years had passed after the trust was created.
“Simply stated, Honeywell has no connection with these bankruptcy cases and, perhaps for that reason, did not seek to participate in these cases for the first 15 years that they were pending,” Chatz’s objection says.
“Given that Honeywell has not identified any pecuniary interest in the Plan, the voting on the Plan, or any involvement with the Trust or the bankruptcy estates of CFB and WFB, the Court should resist Honeywell’s invitation to require filing of the ballots that were cast in 2012.”
Chatz feels Honeywell is attempting to identify the diseases afflicting 5,038 claimants.
In a short joinder, Goldberg, Persky & White supported Chatz’s objection. A hearing is scheduled for Sept. 13.
Honeywell has a history of taking asbestos claims to trial. Earlier this year, a California appeals court affirmed a Fresno County verdict of almost $6 million against the company.
From Legal Newsline: Reach editor John O'Brien at jobrienwv@gmail.com.
