Appeals, number of claimants keep Pittsburgh Corning's asbestos bankruptcy grinding through the court system
Late on the Friday that launched the Memorial Day holiday weekend, a judge approved a plan that will finally allow glass and insulation maker Pittsburgh Corning Corp. to emerge from a 13-year stint in bankruptcy.
But that development wasn't enough to stir celebration of a conclusion in the case involving hundreds of thousands of lawsuits alleging that insulation the Plum company produced decades ago contained asbestos that caused deadly cancers and other diseases.
"No doubt there will be objections and appeals," said Edwin Beachler, an attorney with Downtown law firm Caroselli Beachler McTiernan & Conboy who served as local counsel to a Texas law firm involved in the case.
The reorganization plan signed May 24 by U.S. Bankruptcy Court Judge Judith Fitzgerald clears the way for creation of $3.5 billion trust that will assume Pittsburgh Corning's asbestos-related liabilities and pay out the claims. The two companies that own Pittsburgh Corning -- PPG Industries and Corning Inc. -- will contribute millions of dollars to the trust and eventually give up their stakes in the company.
Mr. Beachler and other attorneys say it's likely that insurance companies for Pittsburgh Corning will appeal before a U.S. District Court judge gives the plan final confirmation, meaning victims will wait even longer for payments expected to cover about 37 percent of their claims. Some victims have already died, lawyers said.
"Before it's all resolved ... it could ultimately extend into 2014," Mr. Beachler said.
Though it has taken more than a decade for the case to get this far, that's not unusual in asbestos-related bankruptcies, said James Restivo, an attorney with Reed Smith who is part of a team representing Pittsburgh Corning. He has worked on several other asbestos bankruptcies, including one involving Pittsburgh-based Harbison-Walker which is now part of ANH Refractories.
Asbestos is a fire-resistant mineral that was used in many building and industrial applications until the 1970s when it was phased out because of documented health hazards. Medical experts realized in the early 1900s that exposure to asbestos can cause respiratory diseases and cancer including mesothelioma, a rare form of cancer that attacks the lungs and linings of the heart and abdomen.
The claims against Pittsburgh Corning involve pipe insulation called Unibestos that was manufactured from 1964 to 1972 at plants in Tyler, Texas, and Port Allegany, Pa., in McKean County. The Texas plant was shuttered in 1972 after the federal Occupational Safety and Health Administration found it extremely hazardous.
More than 400,000 asbestos-related lawsuits named the company as a defendant. Pittsburgh Corning settled about 200,000 before it filed for Chapter 11 bankruptcy in 2000, saying the remaining cases could exhaust its assets.
Like other asbestos-related bankruptcies, Pittsburgh Corning's was prolonged by the sheer number of victim claims being processed and a long list of objections, motions and appeals -- many of them from insurance companies ultimately responsible for paying the victims.
Of 40 insurance companies involved in the case, only two were still filing objections when lawyers filed into Judge Fitzgerald's courtroom May 23 to ask for final revisions to the reorganization plan.
"Appeals, unfortunately, have been standard in these cases, which further holds things up," Mr. Restivo said.
As Barry Bressler, an attorney with Schander Harrison Segal & Lewis' Philadelphia office, put it, "In setting up the trust, the insurers want to put in as little as they can, the debtor generally wants to put in as little as it can, and the claimants are looking for as much as they can get. So you have competing interests."
Under the final plan proposed for Pittsburgh Corning, PPG would pay about $825 million to the trust through 2023 along with 1.4 million shares of PPG stock or the cash equivalent. Corning would pay $290 million for the next six years. Their insurers would kick in $1.7 billion.
More than 60 such trusts have been created to resolve asbestos lawsuits, including those formed to handle claims in prominent bankruptcy cases such as Johns Manville and one set up for Harbison-Walker.
For Pittsburgh Corning -- probably better known for its glass block windows used in homes and commercial buildings -- an exit from bankruptcy isn't likely to have a dramatic effect on day-to-day operations.
Since joining the company as chief executive and chairman eight years ago, Phillip Martineau said he has managed it with a "focus on what we could control: how we treat customers, stakeholders and the people we work with and we try to continually improve that."
The company generates about $300 million in annual revenues and has 1,500 employees in North America, Europe and Asia.
Post-bankruptcy, the company will have a new board of directors and Mr. Martineau will continue as chairman. Currently the board includes representatives of PPG and Corning.
"We are very private and have been" since Corning and PPG founded Pittsburgh Corning as a 50-50- joint venture in 1937, Mr. Martineau said. "Part of our private nature is due to the legal restrictions we have in Chapter 11.
"We are highly profitable and growing. We are absolutely a success story that's underneath the radar in Pittsburgh." A number of local attorneys have helped steer the Pittsburgh Corning case through the court over the past 13 years.
Among the Pittsburgh-based firms involved are: Reed Smith, counsel for Pittsburgh Corning; K&L Gates which represents PPG; Buchanan Ingersoll & Rooney, which represents insurance companies; Campbell & Levine, which represents asbestos claimants; Leech Tishman Fuscaldo & Lampl, which represents trade creditors; Clark Hill Thorp Reed, which represents Corning; Tucker Arensberg, representing insurance underwriters; and Dinsmore & Shohl, representing future claimants.
Read more: http://www.post-gazette.com/stories/business/legal/pittsburgh-cornings-asbestos-legal-woes-grinding-on-690160/#ixzz2VKtCkF3e
Late on the Friday that launched the Memorial Day holiday weekend, a judge approved a plan that will finally allow glass and insulation maker Pittsburgh Corning Corp. to emerge from a 13-year stint in bankruptcy.
But that development wasn't enough to stir celebration of a conclusion in the case involving hundreds of thousands of lawsuits alleging that insulation the Plum company produced decades ago contained asbestos that caused deadly cancers and other diseases.
"No doubt there will be objections and appeals," said Edwin Beachler, an attorney with Downtown law firm Caroselli Beachler McTiernan & Conboy who served as local counsel to a Texas law firm involved in the case.
The reorganization plan signed May 24 by U.S. Bankruptcy Court Judge Judith Fitzgerald clears the way for creation of $3.5 billion trust that will assume Pittsburgh Corning's asbestos-related liabilities and pay out the claims. The two companies that own Pittsburgh Corning -- PPG Industries and Corning Inc. -- will contribute millions of dollars to the trust and eventually give up their stakes in the company.
Mr. Beachler and other attorneys say it's likely that insurance companies for Pittsburgh Corning will appeal before a U.S. District Court judge gives the plan final confirmation, meaning victims will wait even longer for payments expected to cover about 37 percent of their claims. Some victims have already died, lawyers said.
"Before it's all resolved ... it could ultimately extend into 2014," Mr. Beachler said.
Though it has taken more than a decade for the case to get this far, that's not unusual in asbestos-related bankruptcies, said James Restivo, an attorney with Reed Smith who is part of a team representing Pittsburgh Corning. He has worked on several other asbestos bankruptcies, including one involving Pittsburgh-based Harbison-Walker which is now part of ANH Refractories.
Asbestos is a fire-resistant mineral that was used in many building and industrial applications until the 1970s when it was phased out because of documented health hazards. Medical experts realized in the early 1900s that exposure to asbestos can cause respiratory diseases and cancer including mesothelioma, a rare form of cancer that attacks the lungs and linings of the heart and abdomen.
The claims against Pittsburgh Corning involve pipe insulation called Unibestos that was manufactured from 1964 to 1972 at plants in Tyler, Texas, and Port Allegany, Pa., in McKean County. The Texas plant was shuttered in 1972 after the federal Occupational Safety and Health Administration found it extremely hazardous.
More than 400,000 asbestos-related lawsuits named the company as a defendant. Pittsburgh Corning settled about 200,000 before it filed for Chapter 11 bankruptcy in 2000, saying the remaining cases could exhaust its assets.
Like other asbestos-related bankruptcies, Pittsburgh Corning's was prolonged by the sheer number of victim claims being processed and a long list of objections, motions and appeals -- many of them from insurance companies ultimately responsible for paying the victims.
Of 40 insurance companies involved in the case, only two were still filing objections when lawyers filed into Judge Fitzgerald's courtroom May 23 to ask for final revisions to the reorganization plan.
"Appeals, unfortunately, have been standard in these cases, which further holds things up," Mr. Restivo said.
As Barry Bressler, an attorney with Schander Harrison Segal & Lewis' Philadelphia office, put it, "In setting up the trust, the insurers want to put in as little as they can, the debtor generally wants to put in as little as it can, and the claimants are looking for as much as they can get. So you have competing interests."
Under the final plan proposed for Pittsburgh Corning, PPG would pay about $825 million to the trust through 2023 along with 1.4 million shares of PPG stock or the cash equivalent. Corning would pay $290 million for the next six years. Their insurers would kick in $1.7 billion.
More than 60 such trusts have been created to resolve asbestos lawsuits, including those formed to handle claims in prominent bankruptcy cases such as Johns Manville and one set up for Harbison-Walker.
For Pittsburgh Corning -- probably better known for its glass block windows used in homes and commercial buildings -- an exit from bankruptcy isn't likely to have a dramatic effect on day-to-day operations.
Since joining the company as chief executive and chairman eight years ago, Phillip Martineau said he has managed it with a "focus on what we could control: how we treat customers, stakeholders and the people we work with and we try to continually improve that."
The company generates about $300 million in annual revenues and has 1,500 employees in North America, Europe and Asia.
Post-bankruptcy, the company will have a new board of directors and Mr. Martineau will continue as chairman. Currently the board includes representatives of PPG and Corning.
"We are very private and have been" since Corning and PPG founded Pittsburgh Corning as a 50-50- joint venture in 1937, Mr. Martineau said. "Part of our private nature is due to the legal restrictions we have in Chapter 11.
"We are highly profitable and growing. We are absolutely a success story that's underneath the radar in Pittsburgh." A number of local attorneys have helped steer the Pittsburgh Corning case through the court over the past 13 years.
Among the Pittsburgh-based firms involved are: Reed Smith, counsel for Pittsburgh Corning; K&L Gates which represents PPG; Buchanan Ingersoll & Rooney, which represents insurance companies; Campbell & Levine, which represents asbestos claimants; Leech Tishman Fuscaldo & Lampl, which represents trade creditors; Clark Hill Thorp Reed, which represents Corning; Tucker Arensberg, representing insurance underwriters; and Dinsmore & Shohl, representing future claimants.
Read more: http://www.post-gazette.com/stories/business/legal/pittsburgh-cornings-asbestos-legal-woes-grinding-on-690160/#ixzz2VKtCkF3e
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