Asbestos-injury plaintiffs have made a plausible case that French multinational Saint-Gobain’s CertainTeed unit defrauded them when it pushed its mass asbestos liabilities into chapter 11, a bankruptcy judge ruled, WSJ Pro Bankruptcy reported. Judge Craig Whitley of the U.S. Bankruptcy Court in Charlotte, N.C., said on Thursday that personal-injury lawyers had made sufficient allegations to support a claim that Compagnie de Saint-Gobain SA and its CertainTeed LLC materials division hindered the rights of asbestos victims. A CertainTeed spokesman said it believes the allegations have no merit and will defend its position vigorously. CertainTeed and several other large, profitable companies have used a Texas corporate law in recent years to move mass asbestos liabilities into bankruptcy, isolated within corporate subsidiaries that have no other business operation. Plaintiffs’ lawyers have challenged the tactic, known as the Texas Two-Step, saying that it lets companies access the protections of chapter 11 without placing business assets in a value-destroying bankruptcy. Judge Whitley on Thursday declined to dismiss a challenge to CertainTeed’s prebankruptcy reorganization, saying the allegations from plaintiffs’ lawyers put forth a plausible claim for relief.
