The U.S. Supreme Court on Monday refused to hear the remaining appeal against Manville Corp.'s reorganization plan, paving the way for the forest products company to end its six-year term in bankruptcy.
The Plan creates a trust, funded with a minimum of $2.5 billion, to pay for asbestos injury claims.
Manville, once the nation’s largest manufacturer of asbestos, filed for Chapter 11 bankruptcy protection in August, 1982, due to a flood of lawsuits by individuals suffering from asbestos-related injuries. Inhalation of asbestos fibers can cause lung cancer and other serious illnesses.
At the time of the filing, more than 17,000 claims were pending against the company, and Manville was being sued more than 400 times a month by people claiming injury from asbestos.
“Today’s action by the Supreme Court is particularly important for the thousands of people injured by asbestos who, we hope, will soon begin to receive compensation for those injuries,"Manville President and Chief Executive Tom Stephens said in a statement.
Denver-based Manville, which began operation 130 years ago, no longer produces asbestos. It now makes fiberglass, forest products and is involved in mining and roofing.
MacArthur Co., a building materials distributor which filed the appeal, has up to 25 days to ask the Supreme Court to reconsider its ruling. A rehearing may be requested only if material new facts have come to light, Manville said.
A Spokesman at MacAthur’s Minneapolis headquarters said the company had no comment at this time.
Manville can begin to consummate its reorganization plan 30 days after the rehearing period expires.
On the consummation date, Manville’s asbestos health claimants and creditors who were owed money when the company filed for reorganization will be eligible to receive payments.
The justices, in a one-line order, declined to review a bankruptcy court’s approval of more than $770 million in settlements between Manville and 29 of its insurance carriers over asbestos health injury and property damage claims.
The justices, without explanation, declined to hear the case, leaving intact the ruling by a U.S. Court of Appeals in New York that affirmed the bankruptcy judge’s approval in 1986 of the reorganization plan.
Manville’s attorneys had urged the Supreme Court to reject the appeal. “There is no institutional reason or justification for further review by this court,” they said in court papers.
The court’s decision not to hear the appeal is significant because it allows Manville to proceed with its unique reorganization plan that sets up a trust fund to pay asbestos victims’ claims. The trust is being funded by Manville and its insurers. In return for their participation, the insurers are protected from lawsuits growing out asbestos claims.
“As a matter of policy, insurance companies should not be given the message that if they settle with a debtor in bankruptcy court they will be allowed to escape their obligations to other insureds,” MacArthur’s attorneys argued.