Asbestos Claims Against Quigley Parent Pfizer Allowed By 2nd Circuit

Asbestos Claims Against Quigley Parent Pfizer Allowed By 2nd Circuit

NEW YORK - (Mealey's) Personal injury suits seeking to hold Pfizer Inc. liable for asbestos-containing products manufactured by bankrupt subsidiary Quigley Co. Inc. under an "apparent manufacturer" theory of liability are not barred by an injunction issued in Quigley's Chapter 11 case, the Second Circuit U.S. Court of Appeals held April 10 (In re Quigley Company, Inc. [Pfizer Inc. and Quigley Company, Inc., v. Law Offices of Peter G. Angelos, Nos. 11-2635, 11-2767], 2nd Cir.).

(Opinion. Document #48-120423-012Z.)

‘By Reason Of’

"We are confident that the Angelos reading of the statutory language at issue here is the correct one.  Section 524(g) is designed to 'facilitat[e] the reorganization and rehabilitation of the debtor as an economically viable entity,' as well as 'make[] it possible for future asbestos claimants to obtain substantially similar recoveries as current claimants,'" the Second Circuit said, citing In re Combustion Eng'g, Inc. (391 F.3d 190, 234 [3d Cir. 2004]).  "Needless to say, barring the prosecution of claims bearing only an accidental nexus to an asbestos bankruptcy is less than tangentially related to that objective."

The panel said the phrase "by reason of" as used in Section 524(g)(4)(A)(ii) of the Bankruptcy Code requires that the alleged liability of a third party for the claims against a debtor arises "as a legal consequence of one of the four relationships between the debtor and the third party" that are outlined in Section 524(g), none of which covers Pfizer.

"Pfizer does not argue that its ownership of Quigley is pertinent in any legal sense to the claims asserted in the Angelos suits.  Indeed, as the District Court very aptly noted, Pfizer's ownership interest in Quigley is 'legally irrelevant' to the Angelos suits' § 400 claims," the Second Circuit held.  "Consequently, the [injunction], modeled as it is on 11 U.S.C. § 524(g)(4)(A)(ii), does not enjoin the suits at issue."

Pfizer is represented by Sheila L. Birnbaum, Jay M. Goffman, George A. Zimmerman and Bert L. Wolff of Skadden, Arps, Slate, Meagher & Flom in New York.  Quigley is represented by Michael L. Cook of Schulte Roth & Zabel in New York.  The Angelos firm is represented by Jeffrey L. Jonas, James W. Stoll and Thomas H. Montgomery of Brown Rudnick in Boston and Edward S. Weisfelner of Brown Rudnick in New York.

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Comments

Anonymous
Anonymous
  • 08-07-2012

That looks good to be around...