Since the publication of our article of Mass Tort Claims in the Fall Edition of TVQ, a number of billion dollar revenue companies have filed bankruptcy, or are contemplating filing bankruptcy, as a result of being targeted by mass litigation. For example, the venerable Owens Corning was forced to file Chapter 11 to resolve asbestos litigation liability estimated in the range of $5 billion. Likewise, Armstrong World Industries, Inc., a subsidiary of Armstrong Holdings, filed for Chapter 11 due to asbestos liability claims. Beyond the concern of mass asbestos claims, tire manufacturers have recently been targeted by plaintiff’s lawyers for alleged tire defects which has become one of the biggest product-liability disputes in automotive history. The press recently reported that Firestone may be forced to file Chapter 11 to deal with the mass litigation that is being filed. A number of multimillion dollar and billion dollar companies are reported to be on the hit list for mass tort litigation. What are the red flags that may indicate your customer may be the next target for Chapter 11 as a consequence of mass tort litigation?
Archive for the ‘Mass Tort Claims’ Category
An Update On Mass Tort Claims Against Your Customers: The Problem Is Spreading And Risk Increasing For Delinquent AccountsMonday, May 2nd, 2011
Mass Tort Claims And Bankruptcy: Are You Selling To A Company On Credit That Is Vulnerable To Major Asbestos Litigation And Thus A Candidate For Chapter 11?Monday, May 2nd, 2011
Credit professionals are vigilant for events that may signal greater risk with their open account sales. Over the last few years, companies that used or consumed asbestos in their operations (as opposed to manufacturers of asbestos) have been shocked to find themselves the target of mass asbestos litigation and personal injury claims.
This mass asbestos litigation has resulted in at least 22 companies filing Chapter 11 to stay this litigation. Despite the fact that these companies were not asbestos producers, a wave of litigation has arisen that threatens the existence of solvent, profitable companies. This wave of asbestos litigation and the resulting Chapter 11 filings does not appear to be ending. There are approximately 200,000 asbestos cases pending in state and federal courts, with 30,000 to 50,000 new cases filed every year.