In Re Global Industrial Technologies, Inc.
645 F.3d 201
| 3rd Cir. | 2011Background
- Chapter 11 petitions were filed in 2002 by Global Industrial Technologies, Inc. (GIT) and certain subsidiaries seeking relief from asbestos-related liabilities tied to APG.
- APG historically used asbestos in its products; by 2002 there were about 235,000 pending silica-related claims and hundreds of thousands of asbestos claims or related liabilities.
- The Plan proposed channeling asbestos and silica claims into two trusts (APG Asbestos Trust and APG Silica Trust) funded by insurance and other sources, with a silica injunction directing silica claims to the APG Silica Trust.
- Hartford, Century, and other insurers (the Objecting Insurers) challenged the Plan, arguing it was not necessary or fair and that they would be harmed by the Silica Injunction and Trust.
- The Bankruptcy Court confirmed the Plan and found Hartford and Century lacked standing to object, a ruling the District Court affirmed; the Third Circuit vacated and remanded for a determination of bankruptcy standing after assessing the record with a broader view of interests.
- The Court emphasized that when a plan affects where money goes (pockets), those with protected interests must be heard and that Hartford and Century may have standing to participate in remand proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hartford and Century have bankruptcy standing to object | Hartford/Century have a protected interest as insurers of policies to be assigned to the APG Silica Trust | Plan is insurance-neutral and does not increase pre-petition liability or impinge on contractual rights | Hartford and Century have bankruptcy standing; remand necessary to develop record |
| Whether the APG Silica Trust and Silica Injunction are lawful under §105 | Collateralized silica claims require the Silica Trust to ensure reorganization | Trust and injunction are necessary and fair to the plan | Remand needed for further factual development; merits not fully resolved on this record |
| Appellate standing of the Objecting Insurers | Insurers have a stake in the plan and its consequences | Appellate standing is more restrictive and not necessary to decide the bankruptcy-standing issue | Not decided on the merits; left for remand depending on later developments |
Key Cases Cited
- Gillman v. Continental Airlines (In re Continental Airlines), 203 F.3d 203 (3d Cir.2000) (necessity and fairness standards for injunctions in reorganizations)
- Combustion Eng'g, Inc., 391 F.3d 190 (3d Cir.2004) (bankruptcy standing and insurance neutrality in trusts)
- Congoleum Corp., 426 F.3d 675 (3d Cir.2005) (insurer standing; collusion issues in bankruptcy)
- Clinton v. City of New York, 524 U.S. 417 (1998) (standing where potential future impacts are concrete)
- The Pitt News v. Fisher, 215 F.3d 354 (3d Cir.2000) (injury-in-fact and personal stake standards in standing)
- Amatex Corp., 755 F.2d 1034 (3d Cir.1985) (broadly construed standing for parties in interest in bankruptcy)
- Travelers Ins. Co. v. H.K. Porter Co., 45 F.3d 737 (3d Cir.1995) (context for bankruptcy standing and participation)