RML, LLC and Old Revco GUC Liquidating Trust
DECISION ON REORGANIZED DEBTORS’ SECOND OMNIBUS MOTION TO ENFORCE THE PLAN INJUNCTION
The motion before the Court arises from the Chapter 11 bankruptcy of Revlon and many affiliated companies (“Revlon“). Revlon describes itself as a world leader in the beauty industry. Before, during, and after its bankruptcy, Revlon made and sold innumerable consumer products, some of which contained talc. As is typical, during the course of the bankruptcy case, this Court imposed a bar date requiring anyone seeking compensation on account of a pre-petition claim against the debtors to file a proof of claim by a certain date. After that date passed, Revlon sought and obtained confirmation of a plan of reorganization that specified the treatment of allowed claims while discharging all associated debts and enjoining further efforts to collect on any claims other than through the distribution process established by the confirmed plan. Revlon‘s plan is now effective, and Revlon and its associated debtor entities are now termed the Reorganized Debtors, called simply “Revlon” or the “Debtors” in this opinion.1
Despite the plan‘s discharge and injunction provisions barring continuing efforts to pursue compensation outside the bankruptcy on account of pre-petition claims, Revlon finds itself a defendant in forty-two lawsuits by individuals (termed “Talc Claimants” by this decision)2 asserting entitlement to compensation for injury or illness allegedly caused by asbestos-contaminated talc in Revlon products. As explained below, although almost all the
The Debtors have moved for an order enforcing the discharge and injunction provisions of their plan of reorganization against the Talc Claimants’ continuation of their lawsuits against Revlon. The Debtors argue that their Third Amended Joint Plan of Reorganization (the “Plan“), which this Court confirmed on April 3, 2023, extinguished the underlying claims and enjoined any action to collect on them outside of the bankruptcy case.
Certain threshold issues are not in serious dispute but are necessary to the motion‘s resolution: the Talc Claimants hold claims as that term is defined under the Bankruptcy Code, and, under both the Code and Revlon‘s Plan, unless some exception exists as to a particular claim, the Plan and the order confirming it discharged those claims and enjoined all non-bankruptcy collection efforts. Thus, the Talc Claimants can prevail only if they establish some reason that they are not subject to the generally applicable discharge and injunction of the Plan.
The Talc Claimants raise two main contentions in opposition, both of which the Court rejects for reasons discussed below. First, they contend that the Bankruptcy Code requires debtors to employ and satisfy the asbestos-specific provisions of
In brief, the Court rejects the Talc Claimants’ arguments based on Section 524(g) because those arguments clash with well-established case law and, most fundamentally, with the statute‘s plain language, which is permissive and allows but does not require use of certain mechanisms for dealing with latent asbestos-related injuries. The Court rejects the Talc Claimants’ notice-based arguments because the Debtors provided notice that meets the recognized requirements of due process, which among other things authorizes the use of publication notice as to creditors whose identities are “unknown” to the debtor. The Court accordingly grants Revlon‘s motion.
BACKGROUND
A. Revlon‘s Bankruptcy, Bar Date, and Confirmed Plan Including Claim Discharge and Injunction Provisions
The Debtors filed a voluntary Chapter 11 bankruptcy petition on June 15, 2022. In re Revlon, Inc., No. 22-10760 (Bankr. S.D.N.Y. June 15, 2022) (the “Main Case“), Petition 4, ECF No. 1. In papers accompanying the petition, Revlon, which carried substantial corporate debt, attributed its need for financial relief primarily to an inability to meet its financing costs due to business challenges including decreased sales associated with the COVID-19 pandemic followed by supply chain challenges that hindered Revlon‘s ability to achieve its full sales and revenue potential. Main Case, Declaration of Robert M. Caruso ¶ 9, ECF No. 30. While not characterizing tort or product liability exposure as driving their nеed to file for bankruptcy, on their schedules and statements of financial affairs the Debtors listed certain pre-petition
The Debtors promptly retained Kroll Restructuring Administration LLC as their claims and noticing agent and provided notice of their bankruptcy filing by a number of methods, including notices sent by Kroll to Revlon‘s lenders, its major unsecured creditors, the U.S. Trustee, and numerous government agencies. Main Case, Order Appointing Kroll Restructuring Administration LLC, ECF No. 66; Main Case, Aff. of Service of Notice of Commencement Ex. A, ECF No. 54. In addition, the Debtors published notice of their bankruptcy case in the New York Times. Main Case, Certificate of Publication, June 27, 2022, ECF No. 128.
On August 23, 2022, the Debtors moved for entry of an order “(a) establishing deadlines for creditors to submit (i) proofs of claim and . . . (b) approving the form, manner, and notice thereof.” Main Case, Appl. For Entry of an Order Establishing Last Day to File Proofs of Claim 2, ECF No. 536 (the “Bar Date Application“). Those deadlines are the “Bar Dates.” Id. ¶ 9(d).
In the Bar Date Application, the Debtors stated, “Given the size and scope of the Debtors’ businesses, the Debtors have determined that it would be in the best interest of their estates to give notice by publication to certain creditors, including: (i) those creditors to whom no other notice was sent and who are unknown or not reasonably ascertainable by the Debtors, (ii) known creditors with addresses unknown by the Debtors, and (iii) potential creditors with Claims unknown by the Debtors.” Id. ¶ 25. To that end, the Bar Date Application proposed “to publish notice of the Bar Dates in substantially the form as [an exhibit to the Bar Date Application] in the national editions of the New York Times and USA Today, and the national edition of the Globe and Mail in Canada by no later than September 27, 2022” because “[i]n the Debtors’ judgment, publication in widely read national newspapers is likely to reach the largest possible audience of creditors that may not otherwise have notice of these Chapter 11 Cases.” Id. ¶ 26.
On September 12, 2022, this Court approved the Bar Date Application. Main Case, Order (I) Establishing Deadlines for (A) Submitting Proofs of Claim and (B) Reqs. for Payment Under Bankruptcy Code Section 503(b)(9), (II) Approving the Form, Manner, and Notice Thereof, and (III) Granting Related Relief, ECF No. 688 (the “Bar Date Order“). The Bar Date Order set October 24, 2022 as the “General Bar Date” but also stated the Court would deem timely claims from claimants asserting “a personal injury claim arising from a disease allegedly caused by the exposure to cosmetic talc allegedly contained in the Debtors’ products” filed before the date of confirmation of the Debtors’ bankruptcy plan if “such disease was diagnosed by a licensed medical doctor for the first time after the Petition Date.” Id. ¶¶ 4, 6 (“Any such Talc PI Claim filed after the General Bar Date but prior to the confirmation date of a bankruptcy plan, without leave of the Court, shall be deemed timely filed as an unsecured, unliquidated claim.“). In the Bar Date Order, the Court approved a form of publication notice (the “Publication Notice“) and “the manner of providing notice of the Bar Dates as described in the
The Publication Notice made no explicit mention оf talc or asbestos claimants but did state that the Bar Date applied to “each person . . . that holds or seeks to assert a claim (as defined in section 101(5) of the Bankruptcy Code) that arose, or is deemed to have arisen, prior to the Petition Date . . . no matter how remote or contingent . . . including claims for potential unmatured injuries.” Id. Ex. 3. Review of the claims register shows no claimants with names matching those of the Talc Claimants. The Debtors published the Publication Notice on September 22, 2022, in USA Today and the New York Times; they published it the next day in the Globe and Mail. Main Case, Certificate of Publication, Sept. 27, 2022, ECF No. 758.
As the bankruptcy case progressed, the Debtors proposed and sought confirmation of a plan of reorganization. In their disclosure statement accompanying their proposed plan, the Debtors explained that, although they believed all future liability claims that may ultimately be asserted for prepetition use of Revlon talc products were properly dischargeable, they could face future liability claims on account of talc use and those claims could be “adverse and material” to the Reorganized Debtors. Main Case, Solicitation Version of Disclosure Statement 179 (Part XII.A.18), ECF No. 1511. Revlon further explained that it would retain its liability insurance coverage including with respect to Talc Personal Injury Claims. Id. 48 (Part § V.R).
On April 3, 2023, this Court entered an order confirming the Plan. Main Case, Findings of Fact, Conclusions of Law, and Order Confirming the Third Am. Joint Plan of Reorganization of Revlon, Inc. and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code, ECF No. 1746 (the “Confirmation Order“). Under the Confirmation Order, “the distributions, rights, and treatment that are provided in the Plan shall be in comрlete satisfaction, discharge, and release, effective as of the Effective Date, of Claims, Interests, and Causes of Action of any nature whatsoever . . . whether known or unknown, against, liabilities of, Liens on, obligations of, rights against, and Interests in, the Debtors or any of their assets or properties,” id. ¶ 140, and the Confirmation Order enjoined any action to collect on any claims discharged by the Plan, id. ¶ 145.
As is undisputed, the Plan does not attempt to employ or satisfy the requirements of
The motion now before the Court presents the key issue of whether the Debtors’ decision not to provide for asbestos-related claims using the means established by Section 524(g) limits the effect of the Plan‘s discharge and injunction on the Talc Claimants.
B. The Talc Claimants’ Lawsuits and This Motion
After entry of the Confirmation Order, the Talc Claimants sued the Debtors in various courts alleging that the Debtors injured them by exposing them to asbestos-containing talc in the Debtors’ products. Second Omnibus Mot. to Enforce Plan Inj. and Confirmation Order (the “Motion“) Ex. B, Annex 1, ECF No. 960 (annex titled Table of Noncompliant Pending Actions). The Talc Claimants generally
The Debtors have mоved for an order enforcing the Plan‘s injunction against the Talc Claimants, arguing that their lawsuits are impermissible actions to collect on claims that were both discharged by the Plan and subject to the Plan‘s injunction. Id. ¶ 5. The Talc Claimants opposed, contending that the Bar Date Order and Plan injunction do not preclude their suits for two broad reasons: first, that the Debtors’ decision not to provide for asbestos-related claims in keeping with
The Court heard argument on June 27, 2024, and reserved decision. A transcript of the argument appears at ECF No. 1081 (the “Talc Hr‘g Tr.“).
DISCUSSION
It is undisputed that “[e]ach of the [Talc Claimants’ lawsuits] asserts a claim for alleged damages arising from the use of or exposure to the Debtors’ talc products on or prior to June 15, 2022.” Motion 20 (Edward P. Abbot Decl. ¶ 5).
In brief and as the parties agree, the Bar Date Order in this case is typical of orders issued in most Chapter 11 cases as a means to permit debtors to identify, challenge or quantify, and plan for the satisfaction of all allowed claims against them. This is a key means of achieving the Bankruptcy Code‘s objectives of ensuring the orderly and just treatment of creditors while facilitating the reorganization of debtors’ affairs.
The Bankruptсy Code further authorizes debtors to propose and courts to confirm plans of reorganization, which must provide for the treatment of claims,
A threshold question here, then, is whether under the Bankruptcy Code the Talc Claimants held prepetition “claims” against the Debtors. They did. The Bankruptcy Code defines a “claim” to include any “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.”
Thus, the Cоurt turns to the Talc Claimants’ two main arguments, which are, respectively, that the Plan cannot discharge or bar their claims because the Plan does not provide for the treatment of their claims in keeping with
Issue 1: 11 U.S.C. § 524(g)
“[I]nterpretation of the Bankruptcy Code starts where all such inquiries must begin: with the language of the statute itself.” Ransom v. FIA Card Servs., N.A., 562 U.S. 61, 69 (2011) (internal quotations omitted).
Congress added Subsection (g) to Section 524 of the Bankruptcy Code in 1994. Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 111, 108 Stat. 4106 (codified at
Section 524(g) uses unmistakably permissive or optional language – e.g., a plan “may” include such provisiоns – and nothing in the statute‘s text terms the provision the exclusive or mandatory way debtors must treat claims that stem from asbestos exposure. To the extent that alone were not dispositive, reading Section 524(g) in context with the generally applicable discharge provisions of Bankruptcy Code Section 1141(d) confirms that Section 524(g) is not the exclusive means of dealing with asbestos claims for at
Further, as recently explained by the Supreme Court, at least one main purpose of
In keeping with the statute‘s permissive and non-mandatory text, none of the cases citеd by the Talc Claimants hold the use of
The remaining cases cited by the Talc Claimants address whether third parties who did not file for bankruptcy nevertheless may secure non-consensual releases from a bankruptcy case in which they were not a debtor. See Parra, 551 B.R. at 120-124; Deutsche Bank AG v. Metromedia Fiber Network, Inc. (In re Metromedia Fiber Network, Inc.), 416 F.3d 136, 142-43 (2d Cir. 2005); In re Combustion Eng‘g, Inc., 391 F.3d 190, 237 & n.50 (3d Cir. 2004), as amended (Feb. 23, 2005). By contrast, the Talc Claimants now before this Court assert claims against the Debtors in this case, not against non-debtor parties who never filed for bankruptcy. The third-party release cases that the Talc Claimants cite do not rule or even shed light on the question of whether debtors must use the provisions of
Meanwhile, the Debtors point out that the Second Circuit has rejected the argument that the lack of a future claims representative, which the Talc Claimants assert the Bankruptcy Code and due process require, amounted to a denial of due process as to a claimant who brought an asbestos-liability claim against a debtor that had gone through bankruptcy. See Berry, 2022 WL 4487889, at *3 (“Mr. Berry argues that because the MFP bankruptcy lacked a Future Claims Representative (“FCR“), Mrs. Berry was denied due process. But he is unable to cite any binding decision in which a court has held that a FCR is necessary to comport with constitutional due process. . . . We thus conclude
Having reviewed the unmistakably non-mandatory and discretion-conferring text of
Issue 2: Notice
The Talc Claimants further argue that ineffective notice deprives the Plan of the power to discharge their claims. See Caplin Opposition ¶ 24 (“[T]he Debtors’ notice program was wholly insufficient. Accordingly, enforcement of a discharge against those claimants would be unconstitutional.“).
There is no real factual dispute about what steps the Debtors took to provide notice of the relevant bar date, which the parties appear to agree was, for purposes of this motion, the key event for which notice was required. Having obtained Court approval to do so, the Debtors published their general bar date notice in national editions of the New York Times, USA Today, and Canada‘s Globe and Mail. Main Case, Certificate of Publication, Sept. 27, 2022, ECF No. 758. That notice stated that all persons holding claims “no matter how remote or contingent such right to payment or equitable remedy may be (including claims for potential unmatured injuries), with certain limited exceptions as set forth in the Bar Date Order, MUST FILE A PROOF OF CLAIM on or before 5:00 p.m., prevailing Eastern Time, on October 24, 2022 (the ‘General Bar Date‘).” Bar Date Order Ex. 3 (emphasis in original). It further advised that ”ANY PERSON OR ENTITY THAT IS REQUIRED TO FILE A PROOF OF CLAIM IN THESE CHAPTER 11 CASES WITH RESPECT TO A PARTICULAR CLAIM AGAINST THE DEBTORS, BUT THAT FAILS TO DO SO PROPERLY BY THE APPLICABLE BAR DATE, SHALL BE FOREVER BARRED, ESTOPPED AND ENJOINED FROM: (A) ASSERTING SUCH CLAIM AGAINST THE DEBTORS AND THEIR ESTATES . . . .” Id. (emphasis in original). As the Debtors acknowledgе, the Publication Notice did not include or specifically reference the words “asbestos” or “talc,” and it did not include any more detailed information or guidance directed specifically to talc or asbestos claimants. See id.
The Debtors also published notice of their confirmation hearing in the New York Times, USA Today, and Canada‘s Globe and Mail. Main Case, Certificate of Publication, Mar. 14, 2023, ECF No. 1601. That notice stated that “[i]f confirmed, the Plan shall bind all Holders of Claims” but that Talc Personal Injury Claims against non-debtors would remain unaffected. See id.
“[W]hat constitutes ‘reasonable notice’ principally depends on the status of the parties and whether the creditor is a ‘known’ creditor or an ‘unknown’ creditor. While actual notice is required if the creditor is a ‘known’ creditor, constructive notice is sufficient where a creditor is ‘unknown.‘” DePippo v. Kmart Corp., 335 B.R. 290, 295-96 (S.D.N.Y. 2005) (further citations omittеd). “This Court has not hesitated to approve of resort to publication as a customary substitute in another class of cases where it is not reasonably possible or practicable to give more adequate warning. Thus it has been recognized that, in the case of persons missing or unknown, employment of an indirect and even a probably futile means of notification is all that the situation permits and creates no constitutional bar to a final decree foreclosing their rights.” Mullane v. Central Hanover Bank & Tr. Co., 339 U.S. 306, 317 (1950) (further citations omitted); see also, e.g., DePippo, 335 B.R. at 296 (quoting id.).
Extensive case law defines “known” and “unknown” creditors in the bankruptcy context. A “‘known’ creditor is one whose identity is either known or ‘reasonably ascertainable by the debtor.‘” DePippo, 335 B.R. at 296 (citing Tulsa Pro. Collection Servs., Inc. v. Pope, 485 U.S. 478, 490 (1988)). “A creditor‘s identity is ‘reasonably ascertainable’ if that creditor can be identified through ‘reasonably diligent efforts.‘” Id. (quoting Grant, 223 B.R. at 659). “Reasonable diligence dоes not require ‘impracticable and extended searches . . . in the name of due process.‘” Grant, 223 B.R. at 659 (quoting Mullane, 339 U.S. at 317-18). “The requisite search instead focuses on the debtor‘s own books and records. Efforts beyond a careful examination of these documents are generally not required.” Id.
The burden of proving inadequate notice lies with the party contending that a plan‘s discharge or injunction does not apply – here, the Talc Claimants. In re Chemtura Corp., No. 09-11233 (JLG), 2016 WL 11651714, at *8 (Bankr. S.D.N.Y. Nov. 23, 2016) (“As the parties challenging enforcement of the Discharge Injunction, the Benzene Claimants bear the burden of proving that it does not bar their actions.” (citing Waterman S.S. Corp. v. Aguiar (In re Waterman S.S. Corp.), 200 B.R. 770, 774-75 (Bankr. S.D.N.Y. 1996))). None of the Talc Claimants filed their lawsuits against the Debtors before the Debtors filed bankruptcy, and the Talc Claimants admit they are unknown creditors for purposes of due process. See Motion Ex. B, Annex 1; Talc Hr‘g Tr. 44:4-7. The Talc
The Talc Claimants argue, however, that the published notices the Debtors gave failed to satisfy due process requirements, largely because the bar date notice did not mention talc at all. See Caplin Opposition 26-29, 35.3 The Talc Claimants point out that cases cited by the Debtors in which debtors exerted themselves to provide notice to specific groups of potential toxic-tort plaintiffs provide little support to the Debtors in this case, because the Debtors made no such effort with respect to the Talc Claimants and persons in their position. Compare Bar Date Application ¶¶ 25-26 and Bar Date Order ¶ 2 and id. Ex. 3 (nowhere mentioning talc or asbestos) with In re Energy Future Holdings Corp, 949 F.3d 806, 823 (3d Cir. 2020) (discussing extensive efforts to give notice to potentiаl asbestos claimants) and Transcript of Hearing at 26:21-28:20, In re Chemtura Corp., No. 09-11233 (JLG) (Bankr. S.D.N.Y. Jan. 31, 2013) (ECF No. 5818). However, those cases did not hold that due process required such exertions. See In re Energy Future Holdings Corp, 949 F.3d at 822-23 (holding debtors’ extensive noticing program sufficient to satisfy due process, but nowhere holding a program of such extent necessary); Gabauer v. Chemtura Corp. (In re Chemtura Corp.), 505 B.R. 427, 431 (S.D.N.Y. 2014) (same). Furthermore, as a practical matter, it is unclear what sort of targeted or more-focused messaging the Debtors could have achieved with respect to the Talc Claimants and persons in their position, and the Talc Claimants have suggested no method for doing so. Further, well-reasoned precedent
from outside this circuit explicitly holds such efforts unnecessary. Williams v. Placid Oil Co. (In re Placid Oil Co.), 753 F.3d 151, 158 (5th Cir. 2014) (“We have never required bar date notices to contain information about specific potential claims. To the contrary, we have determined that publication in the national edition of the Wall Street Journal discharges the pre-confirmation claims of unknown creditors.“); Chemetron Corp. v. Jones, 72 F.3d 341, 348 (3d Cir. 1995) (“It is impracticable. . . to expect a debtor to publish notice in every newspaper a possible unknown creditor may read.“) (internal quotations omitted).
Meanwhile, of the numerous cases that the parties cite, the Court concludes that In re Chemtura Corp., No. 09-11233 (JLG), 2016 WL 11651714 (Bankr. S.D.N.Y. Nov. 23, 2016), presents facts most like those here. That case involved claims brought by unknown creditors who suffered from prepetition exposure to benzene in the debtors’ products. In re Chemtura Corp., 2016 WL 11651714, at *5-7. In that case, the claimants argued that lack of notice prevented the confirmed bankruptcy plan from discharging their claims because, among other things, the debtors’ published bar date notice did not mention benzene. Id. at *14. Furthermore, in that case, the debtors’ publication process made no effort to target users of the debtors’
In such circumstances, which are much like those here, the Chemtura court ruled that “The Bar Date notice contained more than adequate information and language that placed parties on notice of the opportunity to assert claims (and even potential claims) against the Debtors (including the Debtors’ predecessors) by the Bar Date, and was disseminated to different geographical regions of the country intended to maximize the reach of unknown creditors, such as the Benzene Claimants.” Id. So the Court concludes here: the bar date notice did not specify talc claimants as among its intended audience, but it described the claims covered in broad terms that clearly encompassed the Talc Claimants, stating that all persons holding claims “no matter how remote or contingent such right to payment or equitable remedy may be (including claims for potential unmatured injuries)” were obliged to file a timely claim or be forever barred from collecting from the Debtors. Bar Date Order Ex. 3. Effective and sufficient notice required nothing more.
Other cases cited by the Talc Claimants do not better support their position. They cite one case that observed that “[a] creditor who is notified of the bankruptcy but not of his claim is in the same position as a creditor who has notice of his claim, but not of the bankruptcy.” Acevedo v. Van Dorn Plastic Mach. Co., 68 B.R. 495, 499 (Bankr. E.D.N.Y. 1986) (allowing claim to proceed). However, in Acevedo, a non-debtor worker sued a non-debtor manufacturer for a products-liability tort arising from an injury caused by a machine in the plaintiff‘s workplace, and the defendant asserted a claim against the plaintiff-worker‘s employer, the reorganized debtor, for indemnity and contribution. Id. at 496-97. As the injury occurred prepetition and on the premises of the future debtor, for whom the plaintiff worked as an employee, see id., a diligent search of the debtor‘s books and records would be much more likely to have revealed that accident and any potential claims exposure the debtor would have faced than a search of Revlon‘s books and records would have been to reveal the Talc Claimants, who were mere consumers of Revlon products and whose apparently still-latent injuries were not practicably identifiable by Revlon. The toxic-products-exposure facts of Chemtura fit this case better than the workplace-injury situation in Acevedo.
The Talc Claimants also argue that if a claimant could not have predicted the effect of a notice when they received it, the notice cannot satisfy due process. See Johns-Manville Corp. v. Chubb Indem. Ins. (In re Johns-Manville Corp.), 600 F.3d 135, 157 (2d Cir. 2010) (“In order to comprehend that the contemplated channeling injunction would bar Chubb‘s in personam, non-derivative claims against
Two opinions in the Waterman Steamship Corporation bankruptcy case also do not tip the balance in favor of the Talc Claimants. The Bankruptcy Court held that “no future Asbestosis Claimant could be deemed to have relinquished substantive rights when, even if that individual had read the ‘notice,’ those individuals would have remained completely unaware that their substantive rights were affected.” Waterman S.S. Corp. v. Aguiar (In re Waterman S.S. Corp.), 141 B.R. 552, 558 (Bankr. S.D.N.Y. 1992), vacated 157 B.R. 220 (S.D.N.Y. 1993). The District Court vacated the Bankruptcy Court‘s holding but stated that the Bankruptcy Court‘s logic should stand as to claimants who had not manifested symptoms of asbestos-related diseases at the time of notice. Waterman S.S. Corp. v. Aguiar (In re Waterman S.S. Corp.), 157 B.R. 220, 222 (S.D.N.Y. 1993). However, the Bankruptcy Court ruled for the claimants in that case on the basis that the claimants counted as known creditors. Waterman S.S. Corp., 141 B.R. at 558 (“Of the ‘tens of thousands’ of Waterman employees, Waterman knew other employees were exposed to asbestos, yet never listed them on its schedules, or amended its schedules to include this contingent class of claimants. We find that Waterman knew other non-settling former employees had contingent claims in the form of unmanifested asbestos-related diseases prior to confirmation. Thus, Asbestosis Claimants were known creditors entitled to actual notice.“). The decisions in In re Waterman S.S. Corp. had some reason to classify the asbestos claimants as known claimants or otherwise conclude that the debtor had some higher duty towards them, because, despite lacking records of them, the dеbtor had employed each one of them and presumably understood that its workforce constituted a high-risk group. See id. at 554, 558. By contrast, and contrary to the express finding of
Lastly, Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997), is inapposite for two reasons. First, the Supreme Court in Amchem declined to rest its ruling on the question of notice. 521 U.S. at 628 (“Because we hаve concluded that the class in this case cannot satisfy the requirements of common issue predominance and adequacy of representation, we need not rule, definitively, on the notice given here.“). Second, Amchem is a class-action case, not a bankruptcy case, which affects the notice analysis a court performs. See In re Chemtura Corp., 2016 WL 11651714, at *14 (“However, Amchem was a class action case, not a bankruptcy case. . . . [I]t is inappropriate to apply the subjective notice standards under class action law in evaluating the adequacy of a bar date notice in a bankruptcy case.“); In re Johns-Manville Corp., 552 B.R. 221, 244 (Bankr. S.D.N.Y. 2016) (“Notice in a bankruptcy case is not for the purpose of allowing a creditor to retain the right to sue the debtor at a later time. The discharge created by the Bankruptcy Code permаnently enjoins any right to sue on a prepetition claim. The reasoning in Amchem simply does not apply here.“), aff‘d sub nom. Berry v. Graphic Packaging Int‘l, Inc. (In re Johns-Manville Corp.), 623 B.R. 242 (S.D.N.Y. 2020), aff‘d sub nom. Berry v. Graphic Packaging Int‘l (In re Johns-Manville Corp.), No. 20-3693-BK, 2022 WL 4487889 (2d Cir. Sept. 28, 2022). Stephenson v. Dow Chem. Co., 273 F.3d 249 (2d Cir. 2001), is inapposite for the same reasons. As the Second Circuit has recognized, in rem proceedings conducted by bankruptcy courts have due process standards different from those in in personam class action proceedings. Johns-Manville Corp. v. Chubb Indem. Ins. (In re Johns-Manville Corp.), 600 F.3d 135, 154 (2d Cir. 2010) (“But, because the 1986 Orders purport to bind Chubb‘s in personam claims, the better due process analogy in terms of notice and representation principles is to class action settlements, not in rem bankruptcy proceedings.“).
The Court thus concludes that the weight of the law favors the Debtors and that the Talc Claimants have failed to carry their burden of showing the Debtors provided inadequate notice.
CONCLUSION
For the reasons stated above, the Court grants the Second Omnibus Motion to Enforce the Plan Injunction and Confirmation Order. The Debtors shall submit an appropriate proposed order to effectuate this ruling. The Talc Claimants’ time to appeal will run from entry of that order. It is so ordered.
Dated: New York, New York
August 12, 2024
s/ David S. Jones
Honorable David S. Jones
United States Bankruptcy Judge