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Keywords

defendantprecedentbankruptcy

defendantwill

Related Cases

In re Grossman’s, Inc., 389 B.R. 384, 50 Bankr.Ct.Dec. 27

Facts

JELD-WEN, as the successor-in-interest to Grossman's, sought to bar the Van Brunts from pursuing claims related to asbestos exposure from products purchased at Grossman's stores prior to its bankruptcy. The Van Brunts alleged that Mary Van Brunt was exposed to asbestos-containing products in 1977 and was diagnosed with mesothelioma in 2007. JELD-WEN argued that the claims were discharged under the confirmed Chapter 11 plan, which purported to discharge all claims arising before the effective date of the plan.

JELD–WEN, inc. (“JELD–WEN”) is successor-in-interest to Grossman's Inc., GRS Holding Company, Inc. and GRS Realty Company, Inc., as reorganized debtors (collectively, “Grossman's”). This Court confirmed Grossman's chapter 11 plan of reorganization (the “Plan”) in December 1997. Pursuant to the Plan and the order confirming it, all claims against Grossman's were discharged. Through the Plan JELD–WEN acquired all of the stock of and subsequently merged with Grossman's. Almost ten years later, in May 2007, Defendants Mary and Gordan Van Brunt (the “Van Brunts”) sued JELD–WEN and many other defendants in a New York state court for injuries allegedly due to exposure to products and materials containing asbestos.

Issue

Whether the claims asserted by the Van Brunts for asbestos-related injuries were discharged by the Chapter 11 plan confirmation order, which barred claims arising prior to the effective date of the plan.

Thus, this Court must determine if the Van Brunts' State Court Claims arose before or after the effective date of Grossman's Plan.

Rule

Under New York state law, asbestos personal injury causes of action do not arise until an injury manifests itself. The Third Circuit's precedent in Frenville and Schweitzer establishes that a claim arises for bankruptcy purposes at the same time the underlying state law cause of action accrues.

Under New York state law, asbestos personal injury causes of action, such as those held by the Van Brunts, do not arise until an injury manifests itself.

Analysis

The court analyzed the timing of the Van Brunts' claims in relation to the effective date of Grossman's Chapter 11 plan. It found that Mary Van Brunt's claims did not arise until she manifested symptoms of her asbestos-related disease, which occurred nearly ten years after the plan was confirmed. The court emphasized that under New York law, the claims could not be considered to have arisen until the injury was discovered, thus they were not barred by the confirmation order.

Therefore, under New York state law, the Van Brunts' claims did not arise until Mary Van Brunt discovered her asbestos related disease. Mary Van Brunt had no symptomatic manifestations of her asbestos-related disease until the Fall of 2006 and she was not diagnosed with mesothelioma until March of 2007—almost ten years after Grossman's Plan was confirmed.

Conclusion

The court concluded that the Van Brunts' claims were not barred by the confirmation order and granted judgment in favor of the defendants, allowing the claims to proceed.

For the reasons set forth above, I will grant judgment in favor of the Defendants in this adversary proceeding.

Who won?

The Van Brunts prevailed in the case because the court determined that their claims did not arise until after the effective date of the Chapter 11 plan, thus they were not discharged.

Judgment for customer.

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