In re G-I Holdings, Inc.
| Decision Date | 09 September 2016 |
| Docket Number | Case No.: 01-30135 (RG),Case No.: 01-38790(RG) |
| Parties | In Re: G-I HOLDINGS, INC. f/k/a GAF CORPORATION, et al. Debtors. |
| Court | U.S. Bankruptcy Court — District of New Jersey |
(Jointly Administered)
Mark E. Hall, Esq.
Headquarters Plaza
One Speedwell Avenue
Morristown, New Jersey 07962-1901
Co-Attorney(s) for the Reorganized Debtors, G-I Holdings, Inc., et al
Quinn Emanuel, Urquhart & Sullivan, L.P.
BY: Andrew J. Rossman, Esq.
Scott C. Shelley, Esq.
Jacob J. Waldman, Esq.
Princeton Pike Corporate Center
997 Lenox Drive - Building 3
Lawrenceville, New Jersey 08648-2311
Co-Counsel for the New York City Housing Authority Law Offices of Philip J. Goodman, P.C.
BY: Philip J. Goodman, Esq.
280 North Old Woodward Avenue - Suite 407
Birmingham, Michigan 48009
Co-counsel for the New York City Housing Authority
Cohen, Placitella & Roth, P.C.
BY: Christopher M. Placitella, Esq.
Jared M. Placitella, Esq.
Joel Rosen, Esq.
Stewart L. Cohen, Esq.
Harry M. Roth, Esq.
2001 Market Street - Suite 2900
Philadelphia, Pennsylvania 19103
Before the Court is G-I Holdings, Inc., et al's ("G-I") Motion for Summary Judgment against the New York City Housing Authority ("NYCHA") on its Indemnity and Restitution Claims and NYCHA's Cross-Motion for Partial Summary Judgment as to Liability. A hearing was conducted on June 25, 2015, at which time the Court reserved decision. The following constitutes this Court's findings of fact and conclusions of law.
On January 5, 2001, (the "Petition Date"), G-I Holdings, Inc. ("G-I" or "G-I Holdings"), formerly known as GAF Corporation ("GAF") and earlier, as Ruberoid Co. ("Ruberoid"), filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. Chapter 11 Voluntary Petition, In re G-I Holdings, Inc., Case No. 01-30135, ECF No. 1. On August 3, 2001 ACI Inc. ("ACI"), a subsidiary of G-I Holdings, also filed a voluntary petition for relief under Chapter 11.1 Subsequently, G-I Holdings continued to operate its business as a debtor-in-possessionpursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. See 11 U.S.C. §§ 107(a), 1108. On October 10, 2001, the United States Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court") entered an Order directing the joint administration of the G-I Holdings and ACI bankruptcy cases.
The Official Committee of Unsecured Creditors (the "Committee") was appointed on January 18, 2001 by the United States Trustee pursuant to Section 1102(a) of the Bankruptcy Code to represent those individuals who allegedly suffered injuries related to asbestos exposure from products manufactured by the predecessors of G-I. See 11 U.S.C. § 1102(a). On October 10, 2001, this Court appointed C. Judson Hamlin as the Legal Representative, a fiduciary to represent the interests of persons who hold present and future asbestos-related claims against G-I.
G-I Holdings is the successor-in-interest to GAF, an entity named in approximately 500,000 asbestos-related lawsuits. See G-I Holdings, Inc. v. Those Parties Listed on Exhibit A (In re G-I Holdings, Inc.), 313 B.R. 612, 621 (Bankr. D.N.J. 2004). The Committee submitted that, as successor-in-interest to GAF, G-I Holdings remained liable for approximately 150,000 asbestos-related lawsuits filed but unresolved as of the Petition Date and for an unknown number of asbestos-related claims that would be filed in the future. Id.
In early 1994, GAF Building Materials Corporation, an indirect subsidiary of GAF, formed a new corporation as a wholly-owned subsidiary known as Building Materials Corporation of America ("BMCA"). Id. Pursuant to that transaction, BMCA received substantially all of the assets of GAF's roofing products business and expressly assumed $204 million of asbestos-related liability, with G-I indemnifying BMCA against any additional suchliability. Id. BMCA, also an indirect subsidiary of G-I Holdings, is the primary operating subsidiary and principal asset of G-I Holdings. Id.
In early 2007, the Debtors, the Committee, and the Legal Representative (collectively, the "Parties") commenced mediation under the auspices of former United States District Judge Nicholas H. Politan in an effort to resolve the asbestos-related lawsuits. Subsequently, the Parties outlined the principal terms of a global settlement and endeavored to complete a final global settlement with comprehensive documentation in the form of a proposed Chapter 11 plan and its ancillary documents. To preserve the status quo, the Parties mutually agreed to request a stay of all litigation that would be covered under the final global settlement from this Court and other courts of competent jurisdiction. Although lengthy and initially unsuccessful, the negotiations continued until the parties reached a settlement culminating in an agreement in early August 2008 (hereinafter "Global Settlement").
On August 21, 2008, the Parties filed the Joint Plan of Reorganization of G-I Holdings Inc. and ACI Inc. pursuant to Chapter 11 of the Bankruptcy Code (hereinafter "Joint Plan of Reorganization") that implemented the Global Settlement of all asbestos-related lawsuits naming G-I Holdings and any other related entities as defendant(s). The Joint Plan of Reorganization provided for the creation of an asbestos trust pursuant to Section 524(g) of the Bankruptcy Code ("Asbestos Trust"), to which all asbestos-related lawsuits against the Debtors now and in the future would be channeled. Pursuant to the Global Settlement, the Asbestos Trust would assume the Debtors' liability for asbestos-related lawsuits, in exchange for cash on the effective date of the Joint Plan of Reorganization in an amount not to exceed $215 million, and a note in theamount of $560 million issued by the reorganized Debtors and secured by a letter of credit. See Joint Plan of Reorganization at § 4.4, In re G-I Holdings, Inc., Case No. 01-30135, ECF No. 8190. Samuel J. Heyman (hereinafter "Heyman"), owner and Chairman of G-I and BMCA, was the Plan Sponsor.
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 interests in the Debtors had to be filed, other than certain "Excluded Claims" as defined in therein. See Bar Date Order, In re G-I Holdings, Inc., Case No. 01-30135, ECF No. 8257.
On December 3, 2008, Debtors filed a Second Amended Joint Plan of Reorganization and an Amended Disclosure Statement ("Second Amended Joint Plan"). The Second Amended Joint Plan was almost identical to the Joint Plan of Reorganization, but provided for, inter alia, an equity infusion of up to $220 million to fund G-I Holdings' liabilities by the Plan Sponsor. Cf. Joint Plan of Reorganization, supra, at § 4.10, and Second Amended Joint Plan at § 4.10, In re G-I Holdings, Inc., Case No. 01-30135, ECF No. 8590.
On January 12, 2009, the New York City Housing Authority ("NYCHA" or the "Housing Authority") filed an objection to the Second Amended Joint Plan ("NYCHA Objection") stating that it "completely ignore[d] New York law which supports NYCHA's claim for restitution," and that adopting it would mean that "debtor will foist all costs attributable to Debtors upon NYCHA, and therefore, Debtors' Second Amended Joint Plan of Reorganization should berejected as deficient." Objection to Confirmation of Plan at 2, In re G-I Holdings, Inc., Case No. 01-30135, ECF No. 8752. NYCHA filed no further objections to the subsequent third through eighth amended plans.
On or about December 4, 2008, the Debtors submitted the Second Amended Joint Plan to classes of voters as defined therein to accept or reject the Second Amended Joint Plan pursuant to Section 1126 of the Bankruptcy Code. At the conclusion of the solicitation process, the Debtors received sufficient votes in favor of the Second Amended Joint Plan to approve it. Subsequently, the Debtors informed this Court that because of the lack of available credit in the capital markets, the letter of credit required to fund the Asbestos Trust and integral to confirmation of the Second Amended Joint Plan would be difficult, if at all possible, to find. As a result, this Court delayed the confirmation hearing and asked the Debtors to advise it of any further developments via monthly status conferences.
In June 2009, the Debtors informed this Court that they could secure the required letter of credit, and that the confirmation process could resume. After consultation with the Parties, this Court entered the Amended Plan Confirmation Scheduling Order ("Amended Joint Scheduling Order") on July 1, 2009. Amended Joint Scheduling Order, In re G-I Holdings, Inc., Case No. 01-30135, ECF No. 9278. Per the Amended Joint Scheduling Order, this Court established September 4, 2009 as the deadline for parties in interest to file objections to confirmation, and established that the confirmation hearing would commence on September 30, 2009. See id.
The Parties filed a Third Amended Joint Plan of Reorganization on July 2, 2009 (ECF No. 9283), a Fourth Amended Joint Plan of Reorganization on July 28,...
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