Koch Industries has put a division of its Georgia-Pacific unit in Chapter 11 bankruptcy after failing to stem a rising tide of lawsuits by mesothelioma victims who attribute their disease to asbestos-containing drywall compound.
Georgia-Pacific’s Bestwall business manufactured the joint compound, commonly known as “mud,” with chrysotile asbestos fibers until 1977. In a court filing explaining the reasons for its Chapter 11 filing, Bestwall said joint compound in total never amounted to more than 1.5 percent of asbestos-containing products sold in the U.S., yet the company is now named in 70-80 percent of all lawsuits over mesothelioma, a cancer that can be caused by asbestos exposure.
It has paid out $2.8 billion since 2000 and $200 million so far this year, yet faces another 64,000 lawsuits.
Koch Industries, which bought Georgia-Pacific for $13 billion in 2005, made the strategic move of filing for Bestwall’s reorganization in the Western District of North Carolina in Charlotte. That court is home to the Garlock Sealing Technologies bankruptcy, where U.S. Bankruptcy Judge George Hodges issued a series of groundbreaking rulings exposing the widespread practice plaintiff lawyers to manipulate the evidence of asbestos exposure against solvent companies before filing conflicting claims with bankruptcy trusts set up by the insolvent ones.
Read more of this Legal Newsline story on Forbes