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  • Writer's pictureKirk Hartley

Update on GM and Chrysler as to Asbestos Claims

An update seems appropriate in light of the “new” cert petition filed in early September, and comments this week from the asbestos plaintiff’s bar (Joseph Rice of Motley Rice and Robert Phillips of SimmonsCooper) during a seminar panel discussion on the status of various chapter 11 cases. The bottom lines seem to be as follows as to Chrysler and GM.

1) As I’ve described before, the Second Circuit’s August 5 opinion in Chrysler explicitly articulated caveats as to which if any tort claimants will be bound by the rulings to date. That was obviously a victory for the asbestos plaintiff’s bar and they ultimately decided it was a strong enough win to make the choice not to pursue further appeals in GM or Chrysler. Instead, they will in the future fight the issues of which if any would-be future plaintiffs are bound and as to what issues.

2) The Indiana Pension Fund plaintiffs are now trying to obtain certiorari on the fundamental issue of whether section 363 asset sales can be used to sidestep the normal confirmation process. Go here for a Scotusblog summary and a link to the cert petition. As Todd Brown has described before in, and as is described in other posts collected here, the rights of future plaintiffs can be or have been sacrificed in the context of section 363 sales since that process allows the debtor to avoid many of the “rigors” (such as they may be) of the confirmation process. And, as I’ve pointed out, that group of future plaintiffs includes asbestos co-defendants and subrogated insurers. So, if granted, the certiorari petition would raise issues of importance to future chapter 11 cases that include mass tort claims.

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