In re G-I Holdings, Inc., 051712 NJBC, 01-30135 (RG)

Docket Nº01-30135 (RG), 01-38790 (RG) (Jointly Administered)
Opinion JudgeROSEMARY GAMBARDELLA, Bankruptcy Judge.
Party NameIn Re: G-I Holdings, INC., et al., (f/k/a GAF Corporation), Debtors.
AttorneyRiker, Danzig, Scherer, Hyland & Perretti, LLP Dennis J. O'Grady, Esq., Mark E. Hall, Esq., One Speedwell Avenue Morristown, New Jersey 07962 Co-counsel for the Reorganized Debtors. Quinn Emanuel, Urquhart & Sullivan, LLP Andrew J. Rossman, Esq., Jacob J. Waldman, Esq., New York, New York 10010-1...
Case DateMay 17, 2012
CourtUnited States Bankruptcy Courts, Third Circuit

In Re: G-I Holdings, INC., et al., (f/k/a GAF Corporation), Debtors.

Nos. 01-30135 (RG), 01-38790 (RG) (Jointly Administered)

United States Bankruptcy Court, D. New Jersey.

May 17, 2012

Riker, Danzig, Scherer, Hyland & Perretti, LLP Dennis J. O'Grady, Esq., Mark E. Hall, Esq., One Speedwell Avenue Morristown, New Jersey 07962 Co-counsel for the Reorganized Debtors.

Quinn Emanuel, Urquhart & Sullivan, LLP Andrew J. Rossman, Esq., Jacob J. Waldman, Esq., New York, New York 10010-1601 Special Counsel for the Reorganized Debtors.

Sandak, Hennessey & Greco, LLP Marc J. Kurzman, Esq., Stamford, Connecticut 06901-1026 Outside Counsel for the Reorganized Debtors.

Fox Rothschild, LLP Jeffrey M. Pollack, Esq., Princeton Pike Corporate Center Lawrenceville, New Jersey 08648-2311 Co-counsel for the New York City Housing Authority.

Law Offices of Philip J. Goodman, P.C. Philip J. Goodman, Esq., Birmingham, Michigan 48009 Co-counsel for the New York City Housing Authority.

OPINION

ROSEMARY GAMBARDELLA, Bankruptcy Judge.

MATTER BEFORE THE COURT

Before the Court is a Motion to Correct Mistake in the Court's December 14, 2010 Opinion, pursuant to Rule 60(a) and (b) of the Federal Rules of Civil Procedure, made applicable by Rule 9024 of the Federal Rules of Bankruptcy Procedure, and 11 U.S.C. § 105, filed by Claimant New York City Housing Authority (NYCHA). NYCHA filed a proof of claim on October 10, 2008, for asbestos property damage to housing complexes in the amount of $500 million to pay for the abatement of asbestos-containing materials allegedly originally manufactured, mined, distributed, and sold by G-I Holdings, Inc. or its predecessors in interest. On December 10, 2008, the Reorganized Debtors filed an objection to the NYCHA Claim, and on December 14, 2010, this Court issued its opinion granting in part and denying in part the Debtors' Objection to the NYCHA Claim, In re G-I Holdings, Inc., 443 B.R. 645 (Bankr. D.N.J. Dec. 14, 2010) ("December 14, 2010 Opinion"). Thereafter, discovery proceeded until conflicting interpretations of the December 14, 2010 Opinion brought the instant issue before the Court. On October 31, 2011, and November 28, 2011, the parties raised the issue at separate status conferences. On February 16, 2012, the Court held a hearing and reserved decision. The following constitutes this Court's findings of fact and conclusions of law.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

A. Background

The Court need not recite the entire history of the case, and what follows is a brief overview of the background of the administrative case and the involvement of NYCHA, focused primarily on those facts most relevant to NYCHA's Motion to Correct Mistake in the Court's December 14, 2010 Opinion.1

On January 5, 2001, G-I Holdings, Inc. ("G-I") filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code ("Bankruptcy Code"), and continued to operate its business as a debtor-in-possession. On August 3, 2001, ACI, Inc. ("ACI"), a subsidiary of G-I, also filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. Pursuant to this Court's Order on October 10, 2001, the two cases have been jointly administered.2

On January 25, 2001, the Office of the U.S. Trustee appointed the Official Committee of Unsecured Creditors pursuant to 11 U.S.C. § 1102(a), ECF No. 87, and on October 10, 2001, the Court appointed C. Judson Hamlin as Legal Representative-a fiduciary representative of the interests of persons holding present and future asbestos-related claims against G-I, ECF No. 603.

By Order dated September 5, 2008 ("Bar Date Order"), this Court fixed October 15, 2008, as the bar date by which all proofs of claim against any interest in the Debtors had to be filed, other than certain "Excluded Claims." See Bar Date Order, Sept. 5, 2008, ECF No. 8257.

Chief Judge Garrett Brown of the U.S. District Court for the District of New Jersey and this Court, by Order dated November 12, 2009, jointly approved the Debtors' Eighth Amended Joint Plan of Reorganization. ECF No. 9787.

B. NYCHA Proof of Claim

NYCHA filed its proof of claim on October 10, 2008, in the amount of $500 million to remediate asbestos-related property damage to NYCHA-owed housing complexes and buildings ("NYCHA Claim"). NYCHA asserts there are asbestos-containing products originally manufactured, mined, distributed, and sold by Debtors or their predecessors-in-interest in those housing complexes and buildings and alleges it incurred costs necessary to abate the health hazards by replacing such products with non-toxic substitutes.

The Proof of Claim lists the basis for the claim as "Other: Property Damage, " states the claim was incurred on "various" dates, and refers to "attachments and statement" as supporting documentation. Attached to the Proof of Claim is a Statement in Support of Proof of Claim of New York City Housing Authority ("Statement in Support"), dated October 9, 2008, and an attachment that identifies NYCHA Developments. See NYCHA Mot. to Correct Mistake ex. 2, Dec. 13, 2011, ECF No. 10552. The Statement in Support reads:

1. The asbestos property damage claim of NYCHA, to which this Statement is attached, includes hundreds of buildings owned by NYCHA, built with products identified as having been manufactured by the Debtors, or having been manufactured with asbestos fiber for which the Debtors are legally responsible and include tens of millions of feet of vinyl asbestos floor tile ("VAT"), roofing materials, insulation materials. It would be extremely burdensome, if not impossible, to assemble, collect and submit all of the documentation supporting this asbestos property damage claim at this time, particularly in view of the extremely short period of time from the issuance of the Court approved Notice of [Bar Date] and the actual Bar Date of October 15, 2008.

2. Attached to NYCHA's Proof of Claim are representative documents which demonstrate the types of product identification documentation which establish the presence of Debtor's products in NYCHA's buildings. The voluminous documentation for all of the housing complexes and buildings included in the Claim are being gathered, organized and prepared for submission in support of the Claim.

Id.

On November 17, 2008, supplementary documentation to the Proof of Claim was filed, which includes: "Ruberoid Roofing Claim Example Documents;" "Ruberoid/Vermont Asbestos Fiber RA Keasbey/Rex Cement Claim Example Documents;" "Ruberoid/Vermont Asbestos Fiber EHRET/Baldwin EHRET Hill Claim Example Documents;" "Ruberoid/Vermont Asbestos Fiber Atlantic Asbestos Company Claim Example Documents;" "Empire/ACE/Vermont Asbestos Fiber Claim Example Documents;" "Ruberoid Vermont Asbestos Fiber Flint Home Asbestos Tile Claim Example Documents;" and "Ruberoid/Vermont Asbestos Fiber United States Gypsum Claim Example Documents." NYCHA Mot. to Correct Mistake ex. 3 pts. 1 & 2, Dec. 13, 2011, ECF Nos. 10552-4, -5. These example documents list several different types of asbestos-containing materials, as indicated by the categories of documents listed above. Id.

C. Debtors' Objection to NYCHA Claim

On December 10, 2008, G-I filed an objection to the NYCHA Claim, arguing the underlying asbestos property damage claim was time-barred under New York state law or, alternatively, the NYCHA Claim lacked sufficient detail and documentation in order to state a claim. Debtors alleged the claim provided insufficient information concerning which asbestos-containing products were allegedly installed in which of the NYCHA housing complexes or buildings as well as what actions were taken by NYCHA to abate asbestos-containing products. Debtors' Obj. to NYCHA Cl. ¶¶ 5-7, ECF No. 8625. G-I argued NYCHA's documents "provided no indication of what products were installed" and did not "indicate the nature and extent of the damages" nor "costs allegedly incurred or may in the future be incurred." Id. ¶¶ 16-17.

In its Response to Debtors' Objection to the NYCHA Proof of Claim, NYCHA stated it had, at the time the Response was filed, expended more than $40 million "just for the removal and replacement of asbestos-containing floor tile (vinyl asbestos floor tile or VAT')." Resp. to Proof of Cl. Obj., Jan. 6, 2009, ECF No. 8733. It went on:

Among the hundreds of asbestos abatement projects, a large number involved removal and replacement of asbestos-containing materials manufactured and sold by G-I's predecessors, including but not limited to GAF, Ruberoid, Mastic, and Matico.... On November 17, 2008, NYCHA submitted a First Supplemental Submission enclosing additional documents establishing that NYCHA buildings were constructed with ACMs [asbestos-containing materials], such as vinyl asbestos floor tile, roofs, thermal system insulation materials and products manufactured by Debtors' predecessors and other companies with asbestos fiber supplied by Vermont mines.

Id. ¶¶ 2, 9.3

Subsequently, Debtors filed a Reply in Further Support of Debtors' Objection to NYCHA's Proof of Claim on July 7, 2009, in which they further argued about both the nature and the timeliness of the NYCHA Claim. G-I alleged NYCHA was wrongly attempting to invoke the "emergency assistance doctrine" because NYCHA was merely removing vinyl asbestos floor tiles ("VATs") as a "precautionary removal, at the convenience of NYCHA, of a non-friable asbestos-containing VAT, " not because of immediate risk of harm to occupants. Debtors' Reply in Supp. of Cl. Obj. ¶¶ 2, 4, ECF No. 9290. Debtors stated the following in Footnote 2:

In an effort to create an illusion of an asbestos-related hazard to its residents. NYCHA refers to a variety of asbestos-containing products allegedly...

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