A bankruptcy judge said building-products maker CertainTeed LLC appears to have disadvantaged asbestos-injury claimants by placing its asbestos liabilities in chapter 11, spotlighting a corporate maneuver that some congressional Democrats want to curb, WSJ Pro Bankruptcy reported. Bankruptcy Judge J. Craig Whitley said yesterday that the company may have defrauded injury claimants when it used a corporate affiliate with no employees or operations as a “vessel designed to ferry…asbestos liabilities into bankruptcy.” The judge’s ruling didn’t address whether CertainTeed’s move to silo its asbestos liabilities ahead of a bankruptcy filing did in fact defraud asbestos claimants. Other companies have used a similar strategy in an effort to drive settlements of asbestos-injury litigation, and Johnson & Johnson has told injury lawyers in settlement talks it is considering such a move for liabilities related to its talcum-based baby powder. The judge’s decision stopped short of allowing asbestos litigation to resume against CertainTeed, a U.S. unit of France-based Compagnie de Saint-Gobain SA that makes roofing, siding, insulation and drywall for homes. In 2019 CertainTeed, facing roughly 60,000 asbestos lawsuits, with others likely to be filed, divided itself into two entities. The first retained the brand name and business assets. The second, dubbed DBMP LLC, was a vehicle to carry asbestos-related liabilities into chapter 11, while the rest of the company stayed out of bankruptcy.
