In re Johns-Manville Corp.

Citation: 552 B.R. 221Docket: Case Nos. 82 B 11656 (CGM) through 82 B 11676 (CGM) inclusive; Case No. 82 B 11659 (CGM)

Court: United States Bankruptcy Court, S.D. New York; June 30, 2016; Us Bankruptcy; United States Bankruptcy Court

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Graphic Packaging International filed an emergency motion seeking to enforce confirmation orders related to the bankruptcy of the Johns-Manville Corporation and its subsidiary, Manville Forest Products Corporation (MFP). The motion aims to enjoin a lawsuit by Lynda Berry in Louisiana state court, where she claims asbestos liability against Graphic, a successor to MFP. Graphic argues that Berry must first pursue her claims against the Manville Personal Injury Trust, as her claims should be covered by the prior confirmation orders and injunctions. Berry contends that her claims were not discharged by the MFP confirmation order, asserting that MFP is not a beneficiary of the channeling injunction and that Graphic has waived its right to enforce the orders. Additionally, she claims she did not receive due process regarding her claims. An evidentiary hearing was requested by Berry, leading to supplemental briefing ordered by the court.

The Court has jurisdiction under 28 U.S.C. 1334 and identifies the proceeding as "core," concerning the administration of the confirmed bankruptcy estate. The Court retains authority under the confirmation orders to clarify and enforce its injunctions related to the Chapter 11 plans of MFP and Manville. After considering the historical context of the Manville bankruptcy and its extensive involvement in asbestos litigation, the Court granted Graphic's motion to enjoin Berry's state law claims against it as a successor to MFP.

Manville emerged as a dominant player in the asbestos industry, recognized as a leading producer of asbestos products widely used across various sectors in the U.S. for decades. Despite its status as a Fortune 500 company and a model of corporate success, Manville's eventual bankruptcy filing was unexpected and driven by the impending threat of overwhelming litigation anticipated over the following 20-30 years, which it could not manage or finance. Asbestos, a group of naturally occurring fibrous minerals valued for their durability and heat resistance, had been used since ancient times but its health risks became prominent only in the 1960s. The landmark 1973 Borel decision by the Fifth Circuit established strict liability for asbestos manufacturers, including Manville, recognizing asbestos-related diseases as a serious public health issue dating back to the 1920s. Following Borel, asbestos litigation surged, prompting judicial calls for a national framework to manage these cases, a need reiterated by the Supreme Court in 2003, but Congress has yet to respond. By the 1980s, litigation evolved from individual cases to a collective approach by asbestos producers, forming the Asbestos Claims Facility, which later became the Center for Claims Resolution after some members declared bankruptcy. The landscape for asbestos plaintiffs was also limited, with fewer than 50 law firms representing them, predominantly led by Ronald Motley and Gene Locks. This litigation environment became characterized by a dynamic between repeat players, where Manville and its insurers contested liability amidst ongoing lawsuits from plaintiffs.

Approximately twenty-five insurance carriers that issued around 100 policies for Manville largely denied defense and indemnity in asbestos cases, contributing to Manville's bankruptcy due to an inability to access at least $600 million in insurance coverage for mounting asbestos liabilities. On August 26, 1982, Manville and twenty subsidiaries, including MFP—a timber company acquired by Manville in 1978—filed for Chapter 11 bankruptcy protection, with an order for joint administration of the companies. MFP, while a wholly-owned subsidiary of Manville and not involved in asbestos activities, feared derivative liability from Manville’s asbestos claims and filed for reorganization in October 1983, which was confirmed on March 26, 1984. This confirmation discharged MFP from all unsecured, pre-confirmation debts, and MFP was renamed Riverwood International Corporation, with Manville retaining majority ownership.

In 1995, facing cash needs for asbestos litigation, Manville sold Riverwood, which would later merge with Graphic in 2003. Before this merger, Riverwood settled 260 employee asbestos-related claims for $1.513 million and sought insurance recovery. Ms. Berry, diagnosed with mesothelioma in March 2015, filed a lawsuit against Graphic in Louisiana state court on August 24, 2015, claiming damages due to derivative asbestos exposure from her husband's employment at the Mill from 1961 to 2010. She seeks recovery based on strict liability against asbestos producers, including Manville, and negligence from the employer, MFP.

Ms. Berry's petition includes claims against Manville for asbestos production and against Graphic for negligent premises maintenance. Graphic seeks bankruptcy court protection, asserting that Ms. Berry's lawsuit violates MFP and Manville’s Confirmation Orders, and argues her only recourse for asbestos-related injuries is through the Manville Trust. In contrast, Ms. Berry contends: (1) MFP is not a beneficiary of the Manville confirmation order and channeling injunction; (2) her claims against MFP were not discharged or enjoined by the MFP Confirmation Order; (3) her claims remain valid due to ongoing exposure; and (4) Graphic has waived its rights to invoke the bankruptcy discharge or injunction. Ms. Berry acknowledges that any claims against Manville’s asbestos would go to the Manville Trust but argues her premises liability claim against Graphic is not subject to that channeling. She also claims a lack of due process in the bankruptcy proceedings. The court views her lawsuit against MFP as an attempt to circumvent the Manville Trust and gain an unfair advantage over other asbestos victims. The court concludes that Ms. Berry's claims against MFP are prepetition claims subject to MFP’s Plan discharge, as established by the Bankruptcy Code, which releases MFP from all unsecured, pre-confirmation debts, including those designated as Class 3 Claims.

MFP's Plan discharges the Debtor from all debts incurred before the Confirmation Date, irrespective of whether a proof of claim has been filed, allowed, or listed in any schedules, and regardless of acceptance of the Plan by the claim holder. MFP's Confirmation Order prohibits all entities with discharged debts from pursuing litigation to collect these debts, permanently restraining creditors and equity holders from any action against the Debtor or its successors. If Ms. Berry has a pre-confirmation claim against MFP, it would be discharged under this Plan and Order.

The Bankruptcy Code defines "debt" as a liability on a claim, with "claim" encompassing any right to payment, regardless of its status (e.g., liquidated, unliquidated, disputed). This broad definition aims to address all legal obligations of the debtor. The Supreme Court has affirmed that the term "claim" has a wide scope, including contingent, unmatured, and unliquidated claims, which arise even before a right to payment exists under state law.

Various tests exist to determine when a prepetition bankruptcy claim arises, including the accrual test, conduct test, prepetition relationship test, and the foreseeability test. Most courts currently favor the conduct test or prepetition relationship test. The Second Circuit, for instance, applies both these tests in cases involving regulatory environmental claims. In Cha-teaugay I, the court ruled that the EPA held prepetition claims for cleanup costs incurred post-confirmation due to pre-petition environmental hazards, regardless of the EPA's prior responsibility determinations or discoveries.

The court concluded that the Environmental Protection Agency (EPA) would have a right to payment for clean-up costs when incurred, although that right was currently unmatured and contingent due to the timing of the costs. This understanding stemmed from the relationship between the EPA and the debtor, who was subject to EPA regulations, indicating an awareness of potential reimbursable costs. 

Subsequently, the Second Circuit addressed whether a debtor's bankruptcy filing negated its obligations under the Coal Act to make ongoing contributions to a health benefit scheme for retirees. The scheme failed due to a decrease in participating mining companies. The debtor contended that these contributions constituted additional compensation for prepetition labor, raising the question of whether these obligations were prepetition debts. 

The court established that a prepetition claim requires (1) a right to payment and (2) that this right existed before the bankruptcy petition was filed. The court determined that the right to payment under the relevant legislation was not in place at the time of filing, meaning no unmatured right existed. This ruling was based on the fair contemplation test from In re National Gypsum Company, which asserts a claim exists only if the debtor-creditor relationship had the necessary elements for a legal obligation prior to the bankruptcy petition.

In cases involving contingent contract claims, the Second Circuit's definition distinguishes between dischargeable contingent claims and obligations that arise from contracts within the parties' contemplation at the relationship's inception. The fair contemplation test assesses whether prepetition conduct could lead to liability, while the relationship test focuses on mutual awareness of potential liability. Although these tests have been applied in contract and federal statute contexts, their application in tort claims under the Bankruptcy Code remains less definitive. The Second Circuit has indicated that a claim may be prepetition if it arises from a recognized relationship in law. Different bankruptcy courts within the Second Circuit have varied in their approaches to determining the timing of tort claims, employing both the fair contemplation and conduct tests in different cases.

In the 1986 Manville decision, the Court denied relief from the automatic stay to two claimants seeking state law indemnification and contribution from Manville. The Court determined that the claimants possessed prepetition claims subject to the automatic stay since their damages arose from prepetition events. It rejected the Third Circuit's state law analysis from Frenville, which classified claims based on the timing of events controlled by third parties, arguing that this approach distorts the Bankruptcy Code’s policies by equating claims with causes of action for indemnity or contribution under state law while ignoring their prepetition nature. The Court emphasized that the focus should be on when the acts resulting in liability occurred. Although the Second Circuit requires a relationship in tort cases, the Court is guided by other bankruptcy cases involving numerous future tort claimants.

The Third Circuit's Frenville accrual test, which looked to state law for determining when a claim arises under the Bankruptcy Code, has been overruled and widely criticized. Consequently, the Court does not find it appropriate to use state law to ascertain when a cause of action accrues under the Bankruptcy Code. The conduct test, which aligns with the Court's reasoning in the Manville case, examines when the acts leading to liability occurred. In the Fourth Circuit case of Grady, the court affirmed that a tort claimant held a prepetition claim against a debtor whose wrongful acts occurred before bankruptcy. Some courts criticize the conduct test as too broad and require a prepetition relationship—such as contact or privity—between the debtor's conduct and the claimant for a claim to arise.

In re Piper Aircraft Corp. involved a bankruptcy case concerning a debtor that had manufactured defective airplane parts since the 1930s, ultimately filing for bankruptcy in 1991. A claim was filed on behalf of future tort claimants who had not yet identified themselves. The bankruptcy court dismissed the claim, stating that the debtor's prepetition actions were insufficient to establish liability, as the legal representative could not identify specific defective products or the individuals who might be exposed in the future. The court distinguished this case from others where claimants had already suffered injuries prior to the bankruptcy filing. 

On appeal, the Eleventh Circuit upheld the lower court's decision, introducing the "Piper test," which requires that for an individual to have a claim against a manufacturer, there must be a pre-confirmation relationship with the product based on contact or exposure, and the basis for liability must stem from the debtor's prepetition conduct. This formulation has faced criticism, particularly from the Third Circuit, which in JELD-WEN, Inc. v. Van Brunt rejected the stricter interpretation, asserting that claimants exposed to a product prepetition—even without immediate injury—could still have valid claims under the Bankruptcy Code. The Third Circuit emphasized that exposure to a product prior to bankruptcy is a critical factor in recognizing a claim, regardless of when the injury becomes apparent. Despite a trend towards requiring a prepetition relationship for claims, this concept remains debated within various jurisdictions.

Prepetition exposure to asbestos is recognized by courts as constituting a prepetition claim in bankruptcy, as established in several cases, including In re Grossman’s Inc. and In re Quigley Co. A claim arises upon exposure, not manifestation, meaning that if an asbestos claimant was exposed before the bankruptcy petition date, they hold a claim. The relationship test indicates that a sufficient relationship is formed when the claimant's exposure results from the debtor's alleged tortious actions. 

In the case of Ms. Berry, her prepetition exposure to asbestos would qualify as a prepetition claim under the Bankruptcy Code. She acknowledges that her exposure occurred through contact with asbestos-laden products associated with Mr. Berry's work until 2010. Although Ms. Berry argues that her subsequent exposure post-confirmation transforms her claim into a post-petition injury, she admits that it is impossible to determine when her cumulative exposure became sufficient to cause her illness. 

Her contention that all exposures contribute to her mesothelioma diagnosis is challenged by her own statements, which indicate prepetition exposure is more likely to have caused her condition than later exposures. This view has been supported by several state court decisions, establishing that her prepetition exposure is significant and sufficient to account for her asbestos-related injuries, regardless of her claims regarding post-confirmation exposure.

Ms. Berry's claims regarding substantial injury from asbestos exposure are likely to have arisen before the petition date of August 26, 1982, as indicated by her own admission. Under Louisiana law, even with her assertions of continuing exposure, the legal precedent set in *Cole v. Celotex Corporation* suggests that asbestos claims accrue at the time of substantial injury-producing exposures. The Louisiana Supreme Court in *Cole* addressed the complexities of asbestos-related personal injury cases, noting the challenges in pinpointing the date of injury due to the long latency period associated with asbestosis. The court recognized that these cases involve a continuous exposure process rather than a single identifiable traumatic event. It concluded that significant exposures occurred before August 1, 1980, the effective date of the Louisiana Comparative Fault Law, thereby determining that the claims accrued prior to this date. Furthermore, the court noted that widespread awareness of asbestos dangers in the 1960s and 1970s led to regulatory changes that significantly reduced exposure risks, further supporting its conclusion. The Louisiana Supreme Court's findings were also aligned with those of a Washington appellate court regarding the retroactive application of tort reform statutes in similar asbestos cases.

The Koker court established that the plaintiffs' cause of action for asbestos-related injuries accrued at the time of the injury-producing event, which occurred from the late 1960s to 1980s. The Louisiana Supreme Court echoed this reasoning, noting that the degree of asbestos exposure diminished in later years due to increased preventative measures. It recognized that most injury-producing exposures happened before the enactment of relevant legislation. In the case of Ms. Berry, her repeated exposures to asbestos are classified as a dischargeable pre-petition claim against MFP, as her claims arose prior to both MFP and Manville's bankruptcy in 1982. Ms. Berry's assertion that it is scientifically impossible to identify specific exposures contributing to her injuries supports the conclusion that her substantial exposures likely occurred before 1980, particularly given heightened federal regulation of the asbestos industry. Although she proposed a theory of continuing exposure, the court found no basis for recognizing a post-petition claim against MFP.

Regarding due process, even though Ms. Berry has a pre-petition claim, establishing its existence is merely the first step in determining whether it was discharged. The court emphasized the importance of due process in bankruptcy proceedings, which requires notice reasonably calculated to inform interested parties of the action and an opportunity to object. The court concluded that Ms. Berry received adequate due process during MFP's bankruptcy proceedings, leading to the discharge of any claims she may assert against MFP. Actual notice is not a prerequisite for satisfying due process requirements.

The inquiry focuses on whether the party providing notice acted reasonably in selecting methods to inform affected individuals, rather than on whether the intended recipient actually received the notice. The Supreme Court has established that for unknown or missing persons, using indirect means of notification—even if likely futile—does not violate constitutional rights regarding a final decree that may foreclose their claims. Constructive notice through publication is deemed sufficient to satisfy due process for unknown creditors or those with speculative claims.

In the context of Ms. Berry, she argues that her indirect exposure to asbestos and her lack of direct notice regarding the MFP bankruptcy prevented her from knowing about potential claims until her mesothelioma diagnosis in 2015. She contends that future unknown claimants cannot receive adequate due process notice without a claims representative. However, the Court finds her claims unpersuasive, stating that MFP fulfilled due process requirements by providing notice that was reasonably calculated to inform interested parties of the proceedings. It is acknowledged that at the time of MFP's reorganization plan confirmation, Ms. Berry was an unknown, future claimant. MFP's use of publication notice regarding the bankruptcy and bar date was adequate given the circumstances of the unknown creditor.

The bankruptcy estate is required to make "reasonably diligent efforts" to identify creditors. For those creditors deemed not "reasonably ascertainable," publication notice is sufficient instead of direct notification. Not all potential claimants qualify as creditors entitled to actual notice. In the case of MFP, the publication notices were adequate to inform potential claimants about the interrelation of MFP and Manville's bankruptcy proceedings. Notices published in the New Orleans Times-Picayune included joint captions for both MFP and Manville, clearly stating that all pre-petition claims against MFP arising before August 26, 1982, would be permanently barred. Claimants were instructed to file amended proofs of claim against MFP if they had already filed in the Manville case, with assurances that this would not affect their claims in the Manville case.

The publications effectively communicated MFP’s bankruptcy status and its connection to the broader Manville filings, satisfying due process requirements. Additionally, MFP undertook significant efforts to address asbestos issues at its Mill, including participation in industry meetings and extensive removal efforts. While Ms. Berry claimed she was unaware of MFP's bankruptcy and potential asbestos liabilities, some employees had knowledge that any claims against MFP could not proceed without considering the implications of Manville’s bankruptcy. When MFP filed for Chapter 11 in 1982, lawsuits from former employees were pending in Louisiana courts, leading them to file an adversary proceeding in bankruptcy court to continue their claims against MFP.

MFP had not declared bankruptcy in Louisiana, but employee lawsuits were filed there to seek termination of MFP's automatic stay from its New York bankruptcy proceedings. On November 10, 1983, the Louisiana Bankruptcy Court denied the request for relief from the stay and transferred the case to the New York court, noting that MFP and 20 related entities, collectively referred to as "Manville," had filed for reorganization in New York. The Louisiana court emphasized that the New York court had developed expertise regarding the complexities of Manville's Chapter 11 proceedings, particularly concerning compensation mechanisms for asbestos-related claims affecting both current and future claimants.

The ruling highlighted the interconnection between MFP's and Manville's bankruptcy cases, indicating that MFP's ability to reorganize would be influenced by asbestos liabilities. Employee Mr. Berry, who worked at the Mill, filed a claim with the Manville Trust for asbestos injuries caused by exposure from 1961 to 2010. The document argued that it was implausible for Ms. Berry to be unaware of MFP’s bankruptcy or its relation to Manville’s bankruptcy and ongoing asbestos litigation. The notice regarding these proceedings was not limited to publication; rather, it was evident from the start that the bankruptcy aimed to address claims from individuals exposed to asbestos, even if they had not yet shown symptoms of related diseases.

The Manville case included a substantial notice campaign designed to inform as many future asbestos claimants as possible about their rights and the impact of the reorganization plan. This campaign included national advertisements across various media outlets. The court determined that the notice was sufficiently broad to reach all claimants, including unknown ones, countering Ms. Berry's claims that future claimants could not be adequately notified. Her arguments were deemed irrelevant, referencing a class action case under Federal Rule of Civil Procedure 23, which focused on a different legal context.

The Supreme Court ruled in a class action case involving asbestos plaintiffs that the criteria for class certification under Rule 23(b)(3) were not met. Specifically, the Court determined that individual issues for asbestos victims outweighed common questions, failing the predominance requirement. Additionally, the Court found inadequate representation of all class members' interests. While not deeming the notice to nonlitigant asbestos plaintiffs as insufficient, the Court acknowledged the complexity of providing adequate notice to such a large and diffuse group. This notice pertains to the right of non-litigants to opt-out of the class, which is distinct from MFP's notices regarding its confirmation hearing and claims bar date in bankruptcy proceedings. MFP's notices were not intended for class representation or opt-out purposes but were part of the discharge process in bankruptcy, where all prepetition claims are extinguished without opt-out rights for creditors. The Court's reasoning in Amchem does not apply in this context, particularly in light of Ms. Berry's argument that future asbestos claimants are akin to legally incompetent individuals, which the Court found unconvincing. The Manville Trust's existence indicates that due process for future claimants is feasible. Ultimately, Ms. Berry’s claims against MFP, categorized as prepetition claims, are discharged and enjoined but preserved through the Manville Trust mechanism.

The Manville Plan addresses Ms. Berry’s asbestos claim by directing it to the Manville Trust, established for the benefit of current and future asbestos claimants. Ms. Berry retains her right to seek payment from this Trust, which was created in response to Manville's bankruptcy, primarily due to a burgeoning class of future claimants like her. The bankruptcy proceedings were initiated to manage claims from individuals exposed to asbestos who had not yet shown symptoms of disease, emphasizing the necessity of accommodating these future claimants to ensure a meaningful resolution of asbestos-related health issues.

Two years prior to confirming its reorganization plan, it became evident that the plan needed to consider future claimants, whose interests required protection to maintain sufficient assets for resolving asbestos-related health concerns. Manville anticipated a significant increase in lawsuits over the next few decades from individuals exposed to asbestos but not yet symptomatic.

The proceedings specifically aimed to address the claims of future asbestos claimants, leading the court to recognize them as "parties in interest" under the Bankruptcy Code. Consequently, the court appointed a future claims representative to ensure that the interests of future claimants were adequately represented, as the existing committee for present claimants faced a conflict of interest that prevented them from representing both groups effectively.

The Manville Plan aims to treat both present and future asbestos claimants equally, establishing two trusts: the Personal Injury Settlement Trust and the Manville Property Damage Trust. These trusts are intended to ensure the availability of funds to meet ongoing personal injury liabilities while allowing the company to continue operations. The Asbestos Health Trust (AH Trust) is designed to resolve claims from victims of asbestos-related diseases without differentiating based on the disease's manifestation date. Future asbestos claims are treated as “Other Asbestos Obligations” within the same claims handling process as present claims.

The Trust is structured to maintain a continuous source of funding, with Manville committing to pay $75 million annually for 24 years, later extended to 27 years, and to provide access to up to 80% of its common stock and 20% of its profits for the Trust. This arrangement ensures the Trust can satisfy all asbestos health claims. The reorganization of the Manville debtors hinges on the Trust's ability to compensate future claimants, while also protecting the company's operating entities from excessive lawsuits that could threaten reorganization efforts. An injunction is included in the Plan, applying to all health claimants—present and future—preventing lawsuits against the operating entities of Manville for claims categorized under “Other Asbestos Obligations,” thus safeguarding the company from potential financial instability.

Asbestos-related health liabilities are defined by the Manville Plan as those resulting from pre-petition exposure to Manville asbestos, irrespective of when symptoms manifest. Future claimants, while lacking creditor status under the Plan, receive equal treatment to present claimants through an Injunction that channels all claims to the Trust. The permanent injunction in Article IX, paragraph 9.2.A(3) aims to prevent interference with reorganized Debtors, ensuring they can fulfill payment obligations. The injunction is designed to protect the rights of all asbestos claimants by creating a fund for collective recovery and preventing the piecemeal dismantling of the debtor’s estate. Ms. Berry is identified as holding an “Other Asbestos Obligation,” which encompasses future claimants not yet exhibiting symptoms but potentially affected by asbestos exposure. The Manville Plan categorizes these obligations as liabilities for personal injuries related to pre-confirmation exposure to asbestos. Ms. Berry asserts she developed an asbestos disease from exposure linked to her husband's employment at a Manville subsidiary. Her claim is directed to the Manville Trust, established to compensate future victims exposed before 1982. Consequently, all future claimants are barred from suing Manville and its subsidiaries, as outlined in the Manville Confirmation Order.

Parties are restrained from taking actions to collect on any Claim, Interest, or Other Asbestos Obligation against Manville, with the understanding that claimants must pursue satisfaction solely through the Manville Trust. It is clarified that one need not be a recognized creditor of Manville to be subject to this injunction. Holders of asbestos-related claims are directed to adhere to the Claims Resolution Procedures outlined in the Manville Plan, prohibiting direct lawsuits against Manville or its affiliates. The Manville Plan and Trust dictate that Ms. Berry’s claim is channeled to the Manville Trust, which has assumed all liabilities for asbestos-related claims in exchange for assets contributed by Manville, including 24 million shares of stock.

The Trust is tasked with providing equitable compensation to beneficiaries, defined as those holding Trust Claims, which encompass Trust Liabilities, including Other Asbestos Obligations and Allowed AH Claims. Ms. Berry’s claim, stemming from personal injuries due to asbestos exposure before Manville's bankruptcy, qualifies as an Other Asbestos Obligation, thus categorizing her as a Beneficiary. The court acknowledges that her status as a bona fide Beneficiary is not in dispute; she must pursue her claims exclusively through the Trust. The court emphasized that the due process for future asbestos claimants was thoroughly considered during the Manville bankruptcy proceedings, ensuring their claims were recognized and allowing them to file against the Trust, rather than being dismissed as contingent claims. The notice and appointment of a future claims representative further reinforced compliance with due process standards.

Manville extensively published information to notify future asbestos claimants of their rights. The Legal Representative for Future Claimants played a crucial role in the reorganization process, possessing full statutory rights and responsibilities for representation. The court recognized that binding unknown parties to judicial outcomes through fiduciary representation is legally established. It affirmed that future asbestos claimants have been afforded due process, emphasizing that the Plan and Injunction aim to protect the rights of those unable to advocate for themselves due to asbestos-related diseases. The court criticized the Objectors' interpretation of due process as potentially denying justice to asbestos victims.

Specifically regarding Ms. Berry, a future asbestos claimant, she received notice about the bankruptcy and had her interests represented. Her claim is based on exposure to asbestos from her husband, who had filed a successful claim with the Manville Trust. The court concluded that since Ms. Berry's exposure was derivative of her husband’s, she cannot assert a claim against the surviving corporate entities independently, especially as her husband was bound by the Trust’s procedures. Ms. Berry's argument for special treatment based on her claims against MFP, a subsidiary of Manville, was rejected, as she did not challenge MFP's inclusion under the Manville Plan.

Ms. Berry contends that the Manville channeling injunction applies only to derivative claims against Manville’s successors based on Manville’s conduct, asserting her claim against MFP as a direct claim linked to MFP’s own actions. However, the definition of "subsidiary" in the Manville Plan encompasses MFP, as it includes any corporation where the majority voting power is owned directly or indirectly by another entity. The language of the Manville Plan and the Confirmation Orders contradicts Berry's interpretation that the definition of "subsidiary" is limited to derivative claims, as the Confirmation Order explicitly enjoins all persons from initiating actions to collect on any asbestos-related claims against Manville, its subsidiaries, or any successors. The Manville Plan defines “Other Asbestos Obligations” broadly to include all liabilities related to asbestos exposure, thereby specifically prohibiting litigation related to personal injury or damages arising from acts attributed to Manville, including those by its subsidiaries like MFP. Claims against MFP related to the Mill's ownership are considered indirectly claims against Manville, reinforcing that the Confirmation Order bars claims against Manville’s subsidiaries based on both direct and indirect acts attributable to Manville.

The Court interprets the Manville injunction as barring claims by holders of Other Asbestos Obligations, including Ms. Berry, against Manville’s subsidiaries. The Second Circuit has dismissed claims that the injunction improperly protects non-debtor subsidiaries from asbestos claims, emphasizing that even non-debtor subsidiaries can benefit from the injunction if they are linked to the debtor's estate. MFP, however, is classified as a debtor in bankruptcy and was part of the original Manville bankruptcy filing, with its case jointly administered with other Manville entities. MFP's bankruptcy case is closely tied to the Manville reorganization, affecting the Manville estate. Even hypothetically considering MFP a non-debtor subsidiary, it was not used to shield assets, as its profits were accessible to Manville, which remained its majority shareholder and utilized MFP’s earnings to support the Manville Trust. Under the Manville Confirmation Order, Manville is obligated to contribute $75 million annually to the Trust for 27 years, with the Trust having access to 80% of Manville’s common stock.

The Trust is entitled to draw up to 20% of Manville's profits starting in the fifth year after the Consummation Date to meet its obligations. The Plan grants 'tort victims' a beneficial interest in Manville’s ongoing operations. Even if MFP is a non-debtor, its assets are allocated to fund the Manville Trust and are subject to Manville's reach. The Supreme Court affirmed that the Manville Confirmation Order has res judicata effect, binding parties and those in privity regarding any relevant claims. The Manville Plan and its channeling injunction prevent Other Asbestos Obligation claim holders from suing Manville and its subsidiaries, which includes Ms. Berry. She is obliged to submit her claims to the Manville Trust as she has received due process in prior proceedings.

Additionally, the Court rejected Ms. Berry’s assertion that Graphic waived its right to invoke the confirmation orders due to separate asbestos litigation, emphasizing that the bankruptcy discharge injunction remains valid regardless of any initial failure to assert it. The discharge voids any judgments against the debtor concerning dischargeable debts. Ms. Berry’s ongoing state court claims for asbestos-related injuries against Graphic and Manville are enjoined by both the discharge injunction and the channeling injunction. Ultimately, her exclusive recourse is to file a claim with the Manville Trust, with a separate order to follow in alignment with this ruling.

Manville had two categories of insurers: those with policies active during asbestos exposure and those with policies active when symptoms of asbestos-related diseases manifested. The earlier policy insurers claimed that the manifestation of symptoms triggered coverage, while the later policy insurers contended that coverage was triggered by exposure. Most courts have sided with the latter view, asserting that insurance coverage can be activated at the time of exposure. The statute of limitations for asbestos-related injuries varies, with many courts indicating it begins upon discovery of the injury rather than symptom manifestation. Discovery occurs when a claimant becomes aware or should have been aware of their asbestos-related condition. The case cited indicates that the judgment was against Olin Corporation, distinct from MFP and Graphic. The Second Circuit stated that a tort claim for continuing trespass that started before a bankruptcy petition but continued afterward was a prepetition claim and thus discharged. This reflects Congress's intent to provide a fresh start for reorganizing debtors, potentially at the expense of creditors. The Third Circuit later refined its criteria for a valid claim to depend on whether the claimant had a right to payment and when that right arose, referencing relevant non-bankruptcy law, while also noting disagreements with previous interpretations.

In *Cadleway Props. Inc. v. Andrews*, the court references various cases highlighting the principle that judgments do not adjudicate the rights of non-litigants, except under specific exceptions. These exceptions include bankruptcy contexts and class actions, where representative parties must adequately protect the interests of the class, as outlined in Federal Rule of Civil Procedure 23(a)(4). The ability to bind non-litigants requires sufficient notice, which is consistent across both in rem and in personam actions. The document discusses the classification challenges of judicial proceedings in New York and emphasizes that Fourteenth Amendment requirements for due process do not depend on these classifications. The distinction between in rem and in personam actions, while useful in various legal contexts, does not determine the state's power to use constructive service in this case. The *Johns-Manville* case is cited to illustrate that the bankruptcy court's actions were not classified as in rem, which affected the due process standards for notice. It is acknowledged that Graphic is a successor in interest to MFP, with the parties agreeing on this point.