129 B.R. 710 (E.D.N.Y. 1991), 90-3973, In re Joint Eastern and Southern Dist. Asbestos Litigation

Docket Nº:Civ. A. No. 90-3973.
Citation:129 B.R. 710
Party Name:In re JOINT EASTERN AND SOUTHERN DISTRICT ASBESTOS LITIGATION. United States Bankruptcy Court Southern District of New York. In re JOHNS-MANVILLE CORPORATION, et al., Debtors. Bernadine K. FINDLEY, as Executrix of the Estate of Hilliard Findley, Uma Lail Caldwell, as Executrix of the Estate of Odell Caldwell, Edward Lindley, Joseph C. Jones and Jam
Case Date:June 26, 1991
Court:United States District Courts, 2nd Circuit, Eastern District of New York
 
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Page 710

129 B.R. 710 (E.D.N.Y. 1991)

In re JOINT EASTERN AND SOUTHERN DISTRICT ASBESTOS LITIGATION.

United States Bankruptcy Court Southern District of New York.

In re JOHNS-MANVILLE CORPORATION, et al., Debtors.

Bernadine K. FINDLEY, as Executrix of the Estate of Hilliard Findley, Uma Lail Caldwell, as Executrix of the Estate of Odell Caldwell, Edward Lindley, Joseph C. Jones and James William Barnette, Jr., on behalf of themselves, and all others similarly situated as beneficiaries of the Manville Personal Injury Settlement Trust, Plaintiffs,

v.

Donald M. BLINKEN, Daniel Fogel, Francis H. Hare, Jr., Christian E. Markey, Jr. and John C. Sawhill, solely in their capacity as Trustees, Defendants.

Bankruptcy Nos. 82 B 11656 (BRL)-82 B 11676 (BRL).

Civ. A. No. 90-3973.

United States District Court, E.D. New York and S.D. New York.

June 26, 1991

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Elihu Inselbuch, C. Sanders McNew, Caplin & Drysdale, New York City, Frederick M. Baron, Baron & Budd, Dallas, Tex., Ronald L. Motley, Ness, Motley, Loadholt, Richardson & Poole, Charleston, S.C., Christopher M. Placitella, Wilentz, Goldman & Spitzer, Woodbridge, N.J., Robert B. Steinberg, Rose, Klein & Marias, Los Angeles, Cal., Harry F. Wartnick, Cartwright Slobodin, Bokelman, Borowsky, Wartnick, Moore & Harris, Inc., San Francisco, Cal., for class representatives.

John D. Aldock, William R. Hanlon, Shea & Gardner, Washington, D.C., Andrew T. Berry, McCarter & English, Newark, N.J., Richard C. Binzley, Thompson, Hine & Flony, Cleveland, Ohio, Roger E. Podesta, Anne E. Cohen, Geoffrey Coll, Debevoise & Plimpton, New York City, James J. Higgins, Boyar, Higgins & Hayden, Morristown, N.J., Paul F. Jones, Phillips, Lytle, Hitchcock, Blaine & Huber, Buffalo, N.Y., James Crawford Orr, Wilson, Elser, Moskowitz, Edelman & Dicker, Newark, N.J., Earl L. Scott, Wood, Williams, Rafalsky & Harris, New York City, Katherine M. Steele, Seattle, Wash., for Codefendants.

Leslie Gordon Fagen, Clifford Peterson, Beth Friedman Levine, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for future claimants.

James Fite, Paul Safchuck, Reverend James Knight, White Lung Ass'n Baltimore, Md., Myles O'Malley, Mike Saviak, Barbara Zeluck, National Asbestos Victims Legal Action Organizing Committee, Newark, N.J., for individual claimants.

Philip L. Graham, Jr., Edward W. Keane, William E. Willis, Sullivan & Cromwell, New York City, for Manville Corp.

David T. Austern, Manville Personal Injury Settlement Trust, Washington, D.C., Theodore Gewertz, Amy R. Wolf, Wachtell, Lipton, Rosen & Katz, New York City, for Manville Personal Injury Settlement Trust.

Edward T. Dangel, III, Boston, Mass., James Gavin, Gavin & Gavin, Haddonfield, N.J., Richard S. Glasser, Glasser & Glasser, Norfolk, Va., Robert R. Hatten, Patten, Wornom & Watkins, Newport News, Va., Thomas W. Henderson, Theodore Goldberg, Robert L. Jennings, Jr., Tybe Brett, Henderson & Goldberg, Pittsburgh, Pa., Timothy J. Hogan, The Offices of Peter G. Angelos, Baltimore, Md., Robert Jacobs, Jacobs & Crumplar, P.A., Wilmington, Del., Steven Kazan, Kazan, McCallain, Edises & Simon, Oakland, Cal., Hal C. Pitkow, Titusville, N.J., Frederick Schenk, Casey,

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Gerry, Casey, Westbrook, Reed & Hughes, San Diego, Cal., Emil Steck, Jr., Pasadena, Cal., for other beneficiaries.

Mark A. Peterson, Rand Corp., Santa Monica, Cal., Margaret A. Berger, Brooklyn Law School, Brooklyn, N.Y., Court-Appointed Experts.

Leon Silverman, Matthew Gluck, Fried, Frank, Harris, Shriver & Jacobson, New York City, Special Advisor to the Court.

Sidney Auerbach, M.D., New York City, Gregg J. Borri, Boulanger, Finley & Hicks, New York City, D. Jeffrey Campbell, Porzio, Bromberg & Newman, Morristown, N.J., John H. Faricy, Jr., Pustorino, Pederson, Tilton & Parrington, Minneapolis, Minn., Laurence Gold, AFL-CIO Washington, D.C., Bill Golt, Chemical Workers Ass'n of Dupont, H. Peter Haveles, Jr., Cadwalader, Wichersham & Taft, New York City, James J. Higgins, Boyar, Higgins & Hayden, Morristown, N.J., Shepard Hoffman, Baltimore, Md., Alan Kellman, The Jaques Admiralty National Headquarters Detroit, Mich., Robert Lapowsky, Roberta A. Golden, Cohen, Shapiro, Polisher, Shiekman & Cohen, Philadelphia, Pa., for other interested parties.

James W. Whitcomb, Paul F. Jones, General Refractories and Grefco, Inc., Buffalo, N.Y.

BEFORE WEINSTEIN, District Judge, and BURTON R. LIFLAND, Chief Bankruptcy Judge.

WEINSTEIN, District Judge:

TABLE OF CONTENTS I. INTRODUCTION ........................................................ 732 II. HISTORY and PROCEDURAL BACKGROUND ................................... 734 A. Asbestos; Scientific Developments and Knowledge ................. 734 1. History of Asbestos Use ................................... 735 2. Discovery of Health Hazards Associated with Asbestos ...... 737 3. Current Asbestos Studies and Medical Knowledge ............ 739 B. Johns"Manville Corporation ...................................... 742 C. Proof of Industry Knowledge of Health Hazards ................... 743 D. Litigation ...................................................... 745 E. Bankruptcy of Johns"Manville .................................... 751 F. Second Amended and Restated Plan of Reorganization .............. 752 G. Problems with the Trust ......................................... 754 1. Inaccurate Estimates of Claims and Values ................. 754 2. Massive Impleading of Trust Leading to High Transaction Costs, Expensive Settlements and Litigation Costs ....... 758 3. Operational Problems ...................................... 759 4. Trust Payment Plan Promulgated on April 6, 1990 ........... 760 H. Stay of Payments; Stay of Litigation; Orders and Opinions of the Courts ........................................................ 762 I. Rule 706 Expert to Project Future Claims ........................ 763 J. Appointment of Hon. Marvin E. Frankel; Limited Fund Hearings .... 764 K. Negotiations .................................................... 766 L. Stipulation of Settlement; Financing Agreement Between Manville and the Trust ................................................. 767 1. Stipulation of Settlement ................................. 767 2. Distribution Process ...................................... 768 3. Master Agreement Between Trust and Manville ............... 770 M. Appointment of Representative of Future Claimants; Appointment of Laurence Gold .............................................. 771 1. Factual Setting Necessitating Appointment ................. 771 2. Legal Basis of Appointment ................................ 772 3. Amicus Curiae Appointment ................................. 773 N. Courts' Orders of November 23; Notice of Hearings ............... 773 O. Fairness Hearings ............................................... 775 P. Order and Partial Judgment ...................................... 776 III. POSITIONS OF THE PARTIES ON THE FAIRNESS OF THE SETTLEMENT .......... 776 A. Majority Claimants .............................................. 776 B. Minority Claimants ............................................. 777 1. Henderson & Goldberg ..................................... 777 2. Peter G. Angelos ......................................... 778 C. Mississippi Claimants .......................................... 779 D. Steven Kazan for Asbestos Victims of America ................... 779 E. Organizations Representing Asbestos Victims .................... 780 F. Parties Who Continue to Support FIFO Represented by Hal C. Pitkow and Others ............................................ 781 G. Laurence Gold .................................................. 782 H. Leslie Gordon Fagen, Legal Representative of Future Claimants .. 783 I. Codefendants ................................................... 784 J. Distributors ................................................... 785 1. Pacor .................................................... 786 2. MacArthur ................................................ 787 3. E.J. Bartells ............................................ 788 4. General Refractory Company ............................... 789 K. Shipowners ..................................................... 789 L. The Trust ...................................................... 790 M. Manville Corporation ........................................... 791 N. Cimino Plaintiffs .............................................. 791 O. Claimants from Massachusetts Represented by Edward Dangel ...... 791...

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