A bankruptcy judge has ruled to allow a Berkshire Hathaway–affiliated defunct talcum powder supplier to remain in bankruptcy to address thousands of personal injury cases, rejecting a request from a state court-appointed receiver to throw the case out of chapter 11, WSJ Pro Bankruptcy reported. Judge Michael Kaplan of the U.S. Bankruptcy Court in New Jersey said in his ruling Tuesday that the board of directors of former talc supplier Whittaker, Clark & Daniels had the authority to place the company under chapter 11 protection in April. The judge declined to dismiss the case requested by the receiver appointed by a South Carolina trial judge in March. The receiver, Peter Protopapas, was appointed after Whittaker Clark was hit by a $29 million verdict and found to be on the verge of insolvency. He argued in bankruptcy court that the appointment of the receiver by the state court stripped the company board’s authority to file for bankruptcy. Judge Kaplan said in his ruling that he can’t give weight to that argument, which he said was based on the receiver’s “mistaken understanding” of the receivership order. “This court will not, and cannot, give force to any subjective belief that the receivership order achieved something beyond the powers outlined therein — especially when that expansive interpretation would contravene case law and the Bankruptcy Code,” Judge Kaplan wrote in Tuesday’s ruling.
