GP Informational Brief

Case 17-31795 Doc 12 Filed 11/02/17 Entered 11/02/17 09:41:20 Desc Main
Document Page 1 of 52
UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
In re : Chapter 11
:
BESTWALL LLC,1 : Case No. 17-31795
:
Debtor. :
:
:
INFORMATIONAL BRIEF OF BESTWALL LLC
Gregory M. Gordon Garland S. Cassada

Dan B. Prieto Jonathan C. Krisko
Amanda Rush Richard C. Worf, Jr.
JONES DAY ROBINSON, BRADSHAW & HINSON,
2727 N. Harwood Street P.A.
Suite 500 101 North Tryon Street, Suite 1900
Dallas, Texas 75201 Charlotte, North Carolina 28246
Jeffrey B. Ellman Cary Ira Schachter

Brad B. Erens Raymond P. Harris, Jr.
JONES DAY Erin A. Therrian
1420 Peachtree Street, N.E. SCHACHTER HARRIS, LLP
Suite 800 909 Lake Carolyn Parkway, Suite 1775
Atlanta, Georgia 30309 Irving, Texas 75039
Dated: November 2, 2017
1
The last four digits of the Debtors taxpayer identification number are 5815. The Debtors address is
100 Peachtree Street, N.W., Atlanta, GA 30303.
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TABLE OF CONTENTS
Page
I. Introduction ........................................................................................................................ 3
II. The History of Bestwalls Manufacture of Joint Compound Containing a Minimal
Amount of Chrysotile Asbestos ......................................................................................... 9
A. The Source of Asbestos-Related Claims Against Bestwall ....................... 9
B. The Removal of Asbestos From Bestwalls Products.............................. 10
III. Bestwalls Joint Compound Exposed a Limited Number of People to Only
Chrysotile Asbestos ......................................................................................................... 12
A. The Difference Between Chrysotile and Other Asbestos Fiber
Types ........................................................................................................ 12
B. Mesothelioma Is the Primary Asbestos-Related Disease Driving
Litigation Costs ........................................................................................ 14
C. Chrysotile Containing Joint Compound and Asbestos Disease ............... 16
IV. The History of Asbestos Litigation Against Bestwall ..................................................... 18
A. The Bankruptcy Wave Forever Altered Asbestos Litigation................... 19
B. Bestwalls Mesothelioma Claims Experience Post-Bankruptcy
Wave Is Telling ........................................................................................ 21
C. The Court in Garlock and Other Courts Expose Inappropriate
Conduct in the Tort System ..................................................................... 24
D. This Inappropriate Conduct Appears to Have Occurred in Cases
Against Bestwall ...................................................................................... 26
1. Plaintiff No. 1............................................................................... 28
2. Plaintiff No. 2............................................................................... 29
3. Plaintiff No. 3............................................................................... 30
4. Plaintiff No. 4............................................................................... 32
5. Plaintiff No. 5............................................................................... 33
V. The Enormous Costs and Burdens of the Asbestos Litigation ........................................ 34
VI. Bestwalls Objectives in the Chapter 11 Case ................................................................. 36
A. Section 524(g) Provides Bestwall with the Opportunity to
Permanently Resolve Current and Future Asbestos Claims in a
Manner That Is Fair and Equitable .......................................................... 36
B. Bestwalls Proposed Course of Action in the Chapter 11 Case ............... 38
1. Extension or Application of the Automatic Stay ......................... 39
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TABLE OF CONTENTS
(continued)
Page
2. Appointments of Asbestos Claimants Committee and

Future Claimants Representative ................................................ 39
3. Diligence and Discovery .............................................................. 40
4. Plan Negotiations ......................................................................... 41
5. Estimation .................................................................................... 41
6. Plan of Reorganization................................................................. 42
Conclusion ................................................................................................................................... 43
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TABLE OF AUTHORITIES
Page
CASES
Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1997) .................................................................................................................36
Barnes & Crisafi v. Ga.-Pac.,

Case No. MID-L-5018-08 (AS) (N.J. Super. Ct. June 12, 2012) ............................................24
Brassfield v. Alcoa, Inc.

Case No. 2005-61841 (Tex. Dist. Ct. Harris Cnty. Nov. 22, 2006).........................................24
Dunford v. Honeywell Corp.

Case No. CL-25113 (Va. Cir. Ct. Loudoun Cnty. Dec. 10, 2003)...........................................24
Hollander v. Sandoz Pharms. Corp.,

289 F.3d 1193 (10th Cir. 2002) ...............................................................................................18
In re Combustion Engineering, Inc.,

Case No. 03-10495 (Bankr. D. Del. March 7, 2003) ...............................................................39
In re Garlock Sealing Techs. LLC,

504 B.R. 71 (Bankr. W.D.N.C. 2014).............................................................................. passim
In re Garlock Sealing Techs. LLC,

Case No. 10-31607, Adv. No. 10-3145 (Bankr. W.D.N.C. June 7, 2010) ..............................39
In re Kaiser Gypsum Company, Inc.,

Case No. 16-31602 Adv. No. 16-03313 (Bankr. W.D.N.C. Oct. 7, 2016) ..........................7, 39
In re Leslie Controls, Inc.,

Case No. 10-12199 (CSS), Adv. Proc. No. 10-51394
(Bankr. D. Del. July 14, 2010) .................................................................................................39
In re Pittsburgh Corning Corp.,

Case No. 00-22876 (Bankr. W.D. Pa. April 16, 2000 and April 22, 2003) .............................39
In re Quigley Co., Inc.,

Case No. 04-15739 (Bankr. S.D.N.Y. Dec. 17, 2004) .............................................................39
NAI-1503168250 -iii-
In re Specialty Prods. Holding Corp.,

Case No. 10-11780 (PJW) Adv. Proc. No. 10 51085
(Bankr. D. Del. June 4, 2010) ..................................................................................................39
In re W.R. Grace & Co.,

Case No. 01-01139 (Bankr. D. Del. May 3, 2001) ..................................................................39
Ortiz v. Fibreboard Corp.,

527 U.S. 815 (1999) .................................................................................................................36
Siharath v. Sandoz Pharms Corp., 131 F. Supp. 2d 1347 (N.D. Ga. 2001) ..................................18
Stoeckler v. Am. Oil Co.

Case No. 23451 (Tex. Dist. Ct. Angelina Cnty. Jan. 28, 2004) ...............................................24
Wannall v. Honeywell Intl, Inc.,

292 F.R.D. 26 (D.D.C. 2013)...................................................................................................12
STATUTES
United States Code Title 11 Chapter 11 ................................................................................ passim
11 U.S.C. 524(g) ................................................................................................................. passim
OTHER AUTHORITIES
16 C.F.R 1304.4 (Dec. 15, 1977) ................................................................................................12
Alf Fischbein, et al., Drywall construction and asbestos exposure,

40 AM. IND. HYG. ASSOC. J. 402 (1979) ..................................................................................11
Alison D. McDonald et al., Mesothelioma in Quebec Chrysotile Miners and

Millers: Epidemiology and Aetiology, 41(6) ANN. OCCUP. HYG. 707 (1997) .........................16
A.N Rohl, A. M. Langer, I. J. Selikoff, and W. J. Nicholson, Exposure to asbestos

in the use of consumer spackling, patching, and taping compounds,
189 Science 553 (1975) . .........................................................................................................11
Bertram Price & Adam Ware, Time Trend of Mesothelioma Incidence in the
United States and Projection of Future Cases: an Update Based on SEER
Data for 1973 Through 2005, 39(7) CRIT. REV. TOXICOL. 576, 587 (2009). ..........................16
Christine Biederman, Thomas Korosec & Julie Lyons, Toxic Justice,

DALLAS OBSERVER (Aug. 13, 1998) ........................................................................................25
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Consumer Product Safety Commission, CPSC Bans Use of Asbestos in Certain

Consumer Products (April 28, 1977). ......................................................................................11
Dahlgren & Peckham, Mesothelioma associated with use of drywall joint

compound: a case series and review of literature,
INTL J. OF OCC. AND ENV. HEALTH (2012). ...........................................................................18
Dave K. Verma & Charles G. Middleton, Occupational exposure to asbestos in

the drywall taping process, 41(4) AM. IND. HYG. ASSOC. J. 264, 265 (1980) .........................11
Eugene J. Mark & Richard L. Kradin, Pathological recognition of diffuse

malignant mesothelioma of the pleura: the significance of the historical
perspective as regards this signal tumor, 23 SEM. DIAG. PATH. 25, 26 (2006). ......................15
Federal Rule of Bankruptcy Procedure 2004 .................................................................................40
G. Berry, et al., Mortality from all cancers of asbestos factory workers in east
London 1933-80, 57 OCCUP. ENVIRON. MED. 782 (2000) .......................................................15
Herbert Seidman, et al., Mortality Experience of Amosite Asbestos Factory

Workers: Dose-Response Relationships 5 to 40 Years After Onset of Short-
Term Work Exposure, 10 AM. J. INDUS. MED. 479 (1986) ......................................................15
John T. Hodgson & Andrew Darnton, The Quantitative Risks of Mesothelioma

and Lung Cancer in Relation to Asbestos Exposure,
44(8) ANN. OCCUP. HYG. 565, 565 (2000). .............................................................................17
Johns Manville Corp., A Confidential Report on Asbestos Fiber Prepared for the
J.M. Legal Department ..............................................................................................................4
Michele Carbone, et al., Malignant Mesothelioma: Facts, Myths and Hypotheses

227(1) J. CELL. PHYSIOL. 44, 44 (2012) ..................................................................................16
Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation

(1991) .................................................................................................................................15, 19
S. Rep. 108-118 (2003), Judiciary Committee Report on the Fairness In Asbestos

Injury Resolution Act of 2003 (Baron & Budd Memo) ..................................................25, 27
T.A. SPORN, THE MINERALOGY OF ASBESTOS, IN PATHOLOGY OF ASBESTOS-

ASSOCIATED DISEASES 7 (Tim D. Oury et al. eds., 3d ed. 2014).............................................14
THURLBECKS PATHOLOGY OF THE LUNG

(Andrew M. Churg, et al. eds., 3d ed. 2005) ..................................................................... 13-17
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WORLD HEALTH ORGANIZATION, WHO CLASSIFICATION OF TUMORS OF THE

LUNG, PLEURA, THYMUS AND HEART 156 (William D. Travis et al., eds.,
4th ed. 2015) ......................................................................................................................14, 15
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Debtor Bestwall LLC (the Debtor or Bestwall)2 has commenced this proceeding
under chapter 11 of title 11 of the United States Code (the Bankruptcy Code) to resolve current
and future asbestos-related claims permanently and equitably. In this proceeding, Bestwall will
seek to establish a section 524(g) trust for the benefit of current and future asbestos claimants to
pay fully asbestos claims in accordance with trust distribution procedures approved by this
Court.
Prior to 1978, Bestwall and its predecessors manufactured a joint compound product that
contained minimal amounts (typically 3-5% by weight) of chrysotile asbestos.3 As was the case
in In re Garlock Sealing Technologies LLC, 504 B.R. 71 (Bankr. W.D.N.C. 2014), the
manufacture and sale of this product exposed only a limited population to small amounts of
chrysotile asbestos, a form of asbestos the Garlock court found to be less potent than other types
of asbestos.
Despite these facts, Bestwall and its predecessors have been burdened with asbestos
litigation for nearly 40 years, and Bestwall projects that it will be the target of asbestos claims
through at least 2050. Over the four-decade span of this litigation, involving hundreds of
thousands of cases, the financial burden has escalated exponentially, particularly in the last
decade. As numerous defendants filed for bankruptcy, reorganized and established bankruptcy
trusts, including virtually all of Bestwalls primary competitors, increasing numbers of plaintiffs
began to recall purported exposures to Bestwalls old joint compound product, and Bestwall thus
found itself increasingly targeted in place of the companies that had filed for bankruptcy and
2
Bestwall LLC is formerly known as Georgia-Pacific, LLC, a North Carolina limited liability company.
3
Joint compound is used to fill the seams between sheets of drywall and comes in two forms: (i) a powder
that would be mixed with water to form a paste; and (ii) a premixed product applied directly from the
container.
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exited the tort system. This targeting escalated notwithstanding the successful reorganizations of
the large majority of these companies and the creation of dozens of trusts that hold, have paid
and are continuing to pay tens of billions of dollars to the plaintiffs. As the Court found in
Garlock, the asbestos exposures attributable to defendants who have filed for bankruptcy are not
being appropriately taken into account in pending litigation against the defendants remaining in
the tort system. Id. at 84.
Chapter 11 is the only mechanism available that provides all stakeholders with the ability
to achieve a permanent, global resolution of asbestos-related claims that is fair and equitable to
Bestwall, as well as present and future claimants. It does so through a specialized process,
section 524(g) of the Bankruptcy Code, that provides for the participation of representatives of
current and future claimants and, ultimately, the approval of at least 75% of current claimants
and two federal courts. With this Courts assistance, and through negotiations with these
representatives, Bestwall is committed to achieving as soon as possible a fair and permanent
resolution of these claims through a confirmed chapter 11 plan of reorganization.
This brief will describe:
the history of Bestwalls manufacture and sale decades ago of joint compound
products that contained limited amounts of chrysotile asbestos;
the medical and scientific evidence that establishes the low potency of chrysotile,
the low exposure levels for Bestwalls products and the significant differences
between chrysotile and amphibole forms of asbestos;
the history of Bestwalls asbestos litigation, including the disproportionate

naming of Bestwall based on questionable product identification and the
disproportionate size of settlement payments based on, among other things, the
withholding of evidence of exposure to other companies asbestos products;
the substantial costs and burdens of the asbestos litigation; and
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Bestwalls objectives in this proceeding.4
I. Introduction
Bestwall traces its history to the Bestwall gypsum business acquired by Georgia-Pacific
Corporation in 1965. Bestwall Gypsum Company (Bestwall Gypsum), a spin-off of
Certain-Teed Products Company in 1956, manufactured wallboard (which did not contain
asbestos) and joint compound products. Bestwall Gypsums joint compound consisted primarily
of gypsum or limestone that, when mixed with water, created a mud used to seal the joint
between two pieces of drywall and cover the heads of nails and screws to create a smooth,
seamless surface and appearance. Bestwall Gypsum (and its business) was merged into and
became part of Georgia-Pacific Corporation, which was later converted into and renamed
Georgia-Pacific LLC (Old GP). Bestwall Gypsum used asbestos in its joint compound
products, but Old GP stopped using asbestos in these products in 1977. As a result of the 2017
Corporate Restructuring described herein, the Debtor is the successor to Old GPs asbestos
liabilities from the Bestwall Gypsum business.5
From 1965, when it was acquired by Georgia Pacific Corporation, until 1977, the year
Bestwall completed its program of finding substitutes for asbestos in its products, Bestwall
manufactured a limited number of asbestos-containing products, principally joint compound.
The asbestos content of those products generally was only 3-5% by weight and consisted of only
chrysotile asbestos. There are disputes in the scientific and medical community regarding
whether chrysotile can cause mesothelioma, but there is no valid dispute that, if chrysotile causes
4
Additional information on certain of these topics can be found in the Declaration of Tyler L. Woolson
(the First Day Declaration) in support of the Debtors chapter 11 filing and certain first-day relief sought
from the Court, which was filed concurrently with this Brief.
5
When discussing historical matters preceding the 2017 Corporate Restructuring (as defined below), the
term Debtor and Bestwall refer to the Debtor herein and the historical joint compound business when it
was part of Old GP or Bestwall Gypsum.
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mesothelioma (a deadly form of cancer responsible for the bulk of the large-dollar asbestos-
related litigation claims), its potency is substantially lower than the potency of amphibole
asbestos.6 Further, joint compound represented only about 1.5% of all asbestos-containing
products manufactured and sold in the United States. Joint compound was dwarfed by asbestos-
containing insulation and various other construction materials that contained much more toxic
amphibole asbestos.7 Like the asbestos-containing products sold by Garlock, Bestwalls joint
compound resulted in a relatively low exposure to asbestos to a limited population.8
Until the late 1990s, companies that produced large amounts of amphibole asbestos
products paid, as expected given the proven toxicity and highly friable nature of their products,
the overwhelming majority of asbestos-related claims. In contrast, Bestwall was a relatively
insignificant defendant that paid on average only about $6 million per year in defense and
indemnity (settlements and judgments) costs during that period. But, as these primary
defendants exited the tort system by filing for bankruptcy protection in the late 1990s and early
2000s, plaintiffs increasingly turned, and since then have continued to turn, to Bestwall and other
manufacturers to pay their claims. Contemporaneously, plaintiffs began to claim that their
diseases were not caused by exposure to the products of the defendants they had driven into
bankruptcy, and began to assert instead claims of exposure to the products of companies that had
not filed for protection. They did this and are continuing to do this even though the large
majority of these former defendants have established trusts under section 524(g) of the
6
In contrast, there is medical and scientific evidence establishing that amphibole asbestos such as the
asbestos that historically was used in insulation causes asbestos-related disease. Bestwall did not
purchase amphibole asbestos to use in its products.
7
Johns Manville, A Confidential Report on Asbestos Fiber Prepared for the J.M. Legal Department, p. 26.
8
In re Garlock, 504 B.R. at 73, 75.
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Bankruptcy Code that have funded and are continuing to fund the asbestos liabilities of these
companies.
As a result, the asbestos claims and associated costs of defense against Bestwall and other
solvent defendants that remained in the tort system skyrocketed, with Bestwall and the other
solvent defendants being named in a disproportionately high percentage of the filed claims,
paying ever-increasing settlement amounts and incurring substantially higher defense costs. For
instance, although joint compound represented only about 1.5% of all asbestos-containing
products sold in the United States, Bestwall estimates that from 2012 to 2016 it was named in
approximately 70 to 80 percent of all mesothelioma cases filed in the country. Bestwalls total
defense and indemnity costs during these years averaged approximately $160 million. Those
payments reached approximately $184 million in 2015, $174 in million 2016, and $200 million
in 2017 as of the petition date, reflecting the fact that Bestwall is being forced to settle cases that
now have simply become too numerous and expensive to try to conclusion.9 The breadth and
magnitude of the asbestos litigation pending against Bestwall are wildly disproportionate to any
legal liability Bestwall could possibly have, taking into account the type and limited amount of
asbestos fibers used in Bestwalls products and the fact that its products represented only a small
percentage of the asbestos-containing products on the market.
The massive increase in the number of claims against, and the size of the plaintiffs
settlement demands to, Bestwall have been driven by various interrelated shortcomings of and
abuses in the tort system. Two warrant particular mention. First, inexplicably large numbers of
9
Most defense costs are incurred to litigate claims to the point where they can be settled. Some cases are
settled early to save the costs of defense nearly entirely, including group settlements negotiated with
plaintiff law firms for groups of clients. Few of the thousands of asbestos cases filed against Bestwall
ultimately proceed to trial and fewer still are tried to a verdict. For example, in 2016, Bestwall spent
approximately $130 million in indemnity payments (of which approximately $119 million was in
mesothelioma cases) and approximately $44 million in defense costs, but no cases were tried to verdict.
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plaintiffs and their counsel have identified exposures to Bestwalls products as substantial
contributing factors to their disease far more than ever did before the bankruptcies of the
insulation manufacturers, and far more than ever could in view of the low exposures to chrysotile
and the limited population that were subject to those exposures.
Second, significant numbers of plaintiffs and their law firms have failed to identify
exposures to other products for which asbestos trusts are now responsible, even though they
would submit claims to these trusts based on the very same exposures. Each of these practices
substantially impacted the cases against Bestwall, requiring it to defend cases in which it never
should have been identified, and impairing its defense by depriving it of evidence that plaintiffs
were exposed to other companies products, including products containing highly potent
amphiboles. Indeed, the Court in Garlock found numerous examples of plaintiffs failures to
disclose exposures in trust claims and bankruptcy ballots, and Bestwall was a settling defendant
in many of the same lawsuits specifically identified by the Court. As discussed later herein,
Bestwall already has identified from the Garlock estimation trial record numerous examples of
cases in which it was the subject of, and was harmed by, these same practices.
These problems are compounded for a defendant like Bestwall, which faces tens of
thousands of pending claims and thousands of new claims annually, many of which increasingly
assert non-occupational exposure. Overall, Bestwall and its predecessors have spent
approximately $2.910 billion over the last 40 years defending more than 430,000 asbestos-related
personal injury lawsuits, approximately $2.8 billion of which has been spent in just the last
18 years (compared to approximately $100 million in the first 20 years Bestwall was an asbestos
10
Approximately 30% of this amount was covered by insurance before such insurance was almost entirely
exhausted in 2013.
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defendant). As of September 30, 2017, Bestwall had approximately 64,000 pending claims
against it in nearly every state and certain territories of the United States, including
approximately 22,000 that are being actively litigated and approximately 13,300 claims pending
on inactive dockets in various jurisdictions.11 Bestwall expects that thousands of additional
claims will be filed or asserted against it every year for decades to come.12
Administering this tidal wave of cases is a monumental task and has forced Bestwall to
settle as many cases as possible to minimize litigation costs, regardless of whether it has any real
responsibility for the claim at issue.13 Given the onslaught of claims that is expected to continue
for decades, the financial burden this litigation has put on Bestwall is substantial. Standing
alone, the Bestwall Gypsum business would have failed long ago, as the costs of defending
asbestos claims dwarfed the revenues and earnings of that business. The business remained
viable only because of financial contributions made by Old GPs other businesses, whose cash
flow was drained as a result thereof.
On July 31, 2017, Old GP underwent a corporate restructuring (the 2017 Corporate
Restructuring). As a result of the 2017 Corporate Restructuring, Old GP no longer exists and
two new companies were formed:
11
Claims refers to parties alleging injury and not lawsuits. Some asbestos claimants have more than one
lawsuit pending against Bestwall or Old GP at any given time. In addition to the open and inactive claims,
Bestwall has approximately 28,700 claims that have been resolved or dismissed but for which those
resolutions or dismissals have not been finalized.
12
Other cases before this Court have involved similarly overwhelming asbestos litigation. In Garlock, the
debtors had over 100,000 asbestos claims pending at the time of filing. The Garlock debtors had faced
approximately 700,000 total asbestos claims and had paid over $1.6 billion (including defense costs) prior
to its chapter 11 filing. In the case of In re Kaiser Gypsum Company, Inc., Case No. 16-31602, the debtors
faced approximately 14,000 asbestos lawsuits at the time of filing and had been named in more than 38,000
such suits.
13
See In re Garlock, 504 B.R. at 73 (The estimates of Garlocks aggregate liability that are based on its
historic settlement values are not reliable because those values are infected with the impropriety of some
law firms and inflated by the cost of defense.).
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Bestwall, which succeeded to certain assets and liabilities of Old GP, including in
particular certain assets of the historical Bestwall Gypsum business and Old GPs
asbestos liability; and
Georgia-Pacific LLC, a Delaware limited liability company (New GP), which

succeeded to the other assets and liabilities of Old GP, including numerous
businesses unrelated to the historical Bestwall Gypsum business.
As further described in the First Day Declaration, the combination of assets owned by
Bestwall and a funding agreement that is in place with New GP ensures that the Debtor has the
same financial resources and ability to satisfy asbestos claims as Old GP had prior to the 2017
Corporate Restructuring. The purpose of the 2017 Corporate Restructuring was twofold: it
better aligned the defense of Bestwalls asbestos claims with the individuals primarily
responsible for their management, and also provided Bestwall with the option to seek a
resolution of the asbestos claims in this Court under section 524(g) of the Bankruptcy Code,
without subjecting the entire Old GP enterprise (and its unrelated businesses) to a chapter 11
reorganization. Ultimately, Bestwall determined to pursue the option of a restructuring utilizing
section 524(g) of the Bankruptcy Code.
Bestwall has commenced this chapter 11 case to both (a) rationally, permanently and
fairly address current and future asbestos-related claims against it; and (b) treat all claimants
fairly and equitably. Neither result is achievable in the tort system. As specifically envisioned
by Congress, Bestwall intends to use the bankruptcy process to negotiate a fair and permanent
resolution of the asbestos claims with representatives of current and future claimants and to
establish a trust pursuant to section 524(g) of the Bankruptcy Code to pay in full any approved
claims in accordance with trust distribution procedures to be established by this Court.
Ultimately, the Debtor expects to adopt streamlined procedures formulated in cooperation with
the claimants representatives to permit claims to be evaluated and, where appropriate, allowed
and paid without the burden, risks and costs of litigation.
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Bestwall has sufficient resources to fully fund a section 524(g) trust and is committed to
reorganizing as soon as possible. To that end, Bestwall is prepared to commence plan
negotiations with the asbestos claimants committee and the future claimants representative as
soon as they are appointed and ready to discuss a section 524(g) resolution of current and future
asbestos claims against Bestwall.
II. The History of Bestwalls Manufacture of Joint Compound Containing a Minimal

Amount of Chrysotile Asbestos
A. The Source of Asbestos-Related Claims Against Bestwall
Old GP was founded in 1927 as a hardwood lumber wholesaler. In 1965, Old GP
acquired Bestwall Gypsum Co. of Paoli, Pennsylvania (i.e., Bestwall Gypsum) and merged that
company into itself. Bestwall Gypsum manufactured gypsum wallboard and joint compound as
its primary products, as well as various texture products, industrial plasters and other plaster
products. Bestwall wallboard products and nearly all of Bestwalls plaster products never
contained asbestos.14 Old GP remained primarily a paper and lumber company after the
Bestwall Gypsum acquisition and operated the Bestwall Gypsum businesses as its Gypsum
Division. By the mid-1970s, that division had five facilities manufacturing joint compounds.
Other producers of joint compounds at that time included National Gypsum Company; United
States Gypsum Company; Kaiser Gypsum Company, Inc.; Celotex Corporation; Bondex
International, Inc.; United Gilsonite Laboratories; Hamilton Materials; Dowman and The
Flintkote Company. Significantly, each of these companies has since filed for bankruptcy.
Before 1978, Bestwall manufactured joint compounds containing small amounts
(generally 3-5% by weight) of chrysotile asbestos. In drywall installations, seams between
14
Although some of Bestwalls texture and plaster products contained chrysotile asbestos, these products
account for very few of the asbestos claims filed against Bestwall today.
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drywall panels must be filled and other imperfections must be patched using joint compound.
Joint compounds were supplied as either a dry powder to be mixed with water or as premixed
products applied directly from the container. The Bestwall joint compound came in both forms.
Chrysotile was added to the joint compound as a water retention and bulking agent which
contributed to the workability of the product, giving it a consistency that was easy to apply yet
thick enough to adhere to the wallboards surface without running or dripping. Dust containing
low levels of asbestos fibers could be generated when workers mixed dry product, sanded dry or
ready-mix product after application or swept up after use.
Bestwalls Gypsum Division accounted for less than 5% of the revenue of the corporation
and, within the Gypsum Division itself, asbestos-containing products accounted for only about
10% of sales (at peak) when those products were manufactured. Accordingly, Bestwall asbestos-
containing products accounted for less than 1% of Old GPs overall sales.
B. The Removal of Asbestos From Bestwalls Products
By 1970, asbestos had been widely used in many types of construction materials as well
as industrial and consumer products given its favorable physical and chemical properties.
Although studies of populations in heavy amphibole exposure settings raised concerns about
mesothelioma in end users of thermal insulation products, there was no evidence that Bestwalls
chrysotile-containing products were dangerous. Nevertheless, beginning in 1970, in response to
the growing general concerns about asbestos, Old GP initiated efforts to develop asbestos-free
formulations for its products. It did so even though replacing asbestos in joint compound
products was particularly challenging.
By 1973, Bestwall was placing increasing focus and effort on reformulating its products
to remove asbestos, with a particular emphasis on the one-gallon container formulas used by
general consumers. The same year, Bestwall began placing warning labels that complied with
NAI-1503168250 -10-
the rules of the Occupational Safety and Health Administration (OSHA) on its dry joint
compound products. In 1974, Bestwall placed warning labels on its premixed joint compound
products, adding a recommendation to use a respirator when sanding the joint compound (which
went beyond what was required by OSHA).
In 1975, the first study of joint compound exposure appeared in the scientific literature.15
It focused on measuring the levels of exposure and did not report any cases of mesothelioma.16
Although the 1975 study recommended labels be added to the products and the removal of
asbestos, the articles analysis was based on the precautionary assumption, later disproven, that
chrysotile products were as potent as amphibole products. In any event, Bestwall had already
begun taking those steps five years before the study was published and completed them before
the next joint compound study appeared in the peer-reviewed literature.17 In fact, Bestwall
advertised its first full line of asbestos-free joint compound products in 1974. By 1975,
substantially all of Bestwalls powdered joint compounds were manufactured without asbestos,
and it was continuing to work on removing asbestos from all remaining joint compound
products.
In April 1977, the Consumer Product Safety Commission (CPSC) granted a petition to
ban spackling compounds containing asbestos, determining to phase out these products using a
notice and comment rulemaking process.18 In May 1977, Bestwall manufactured its last
15
A.N Rohl, A. M. Langer, I. J. Selikoff, and W. J. Nicholson, Exposure to asbestos in the use of consumer
spackling, patching, and taping compounds, 189 Science 553 (1975).
16
Alf Fischbein, et al., Drywall construction and asbestos exposure, 40 AM. IND. HYG. ASSOC. J. 402 (1979);
Dave K. Verma & Charles G. Middleton, Occupational exposure to asbestos in the drywall taping process,
41(4) AM. IND. HYG. ASSOC. J. 264, 265 (1980).
17
By the time of the second study in 1980, Bestwalls joint compound products had been asbestos-free for
several years.
18
Consumer Product Safety Commission, CPSC Bans Use of Asbestos in Certain Consumer Products
(April 28, 1977).
NAI-1503168250 -11-
asbestos-containing joint compound product19 over a year before the CPSCs ban went into
effect on June 12, 1978.20
It is important to note that the CPSCs ban on asbestos-containing joint compounds was
based on precautionary public health risk modeling using conservative assumptions. As the
Garlock court found, agency actions like these and the models on which they are based do not
establish that the products actually caused disease.21
III. Bestwalls Joint Compound Exposed a Limited Number of People to Only

Chrysotile Asbestos
A. The Difference Between Chrysotile and Other Asbestos Fiber Types
To understand the asbestos litigation against Bestwall, it is necessary to understand the
different varieties of asbestos fibers and their different relationships to disease. There are several
types of mineral substances within the asbestos family. The most common asbestos minerals are
chrysotile, amosite and crocidolite. Chrysotile is in the serpentine family of minerals. Amosite
and crocidolite are in the amphibole family of minerals. Tremolite, another amphibole, is also
relevant in asbestos litigation because it was present in some commercially significant asbestos
deposits.
19
Bestwall had removed asbestos as an ingredient in its texture and plaster products earlier.
20
CPSC. 1977b. Ban on Consumer Patching Compounds Containing Respirable Free-Form Asbestos.
16 C.F.R 1304.4 (Dec. 15, 1977).
21
In re Garlock, 504 B.R. at 81-82 ([Agency policies and regulations] cannot be probative on the issue of
causation because of the differences in the way courts and regulatory authorities assess risk. Regulatory
authorities use precautionary principles to carry out their mandates and use linear projections into a zone
of inference of theoretical risk that are not appropriate for judicial determinations, including causation.
Consequently, agency statements, policies and regulationsand company warnings required by themare
simply not relevant to estimation of Garlocks aggregate asbestos liability.). As explained in Wannall v.
Honeywell Intl, Inc., 292 F.R.D. 26, 41 (D.D.C. 2013), these models are not helpful because they
address[] risk, not cause, and there is a significant distinction between those two concepts (emphasis in
original).
NAI-1503168250 -12-
Chrysotile is distinctly different in microscopic
appearance and chemical composition from the amphibole
family minerals. Chrysotile is classified as a serpentine mineral
because its fibers have a curvy shape, as shown in Figure 1.22
Individual amphibole fibers are thin and needle- or spear-like.
Figures 2 and 3 are photomicrographs of crocidolite and amosite

Fig. 1 Chrysotile
fibers, respectively, and tremolite fibers appear in Figure 4.
Fig. 2 Crocidolite Fig. 3 Amosite Fig. 4 Tremolite
Chrysotile was the only fiber type purchased by Bestwall and its predecessors for use in
its joint compounds. Chrysotile tends to accumulate to only a very limited extent in lung tissue
despite continuous exposure, whereas continuous exposure to amphiboles leads to a continuous
increase in the amphibole fiber concentration in the lung.23 Although the body breaks down
22
Photomicrographs in Figures 1-4 were obtained from the U.S.G.S. Denver Microbeam Laboratorys online
image gallery, at https://usgsprobe.cr.usgs.gov/picts2.html (accessed Oct. 25, 2017) (see images for UICC
Asbestos Chrysotile B standard; UICC Asbestos Crocidolite standard; UICC Asbestos Amosite standard;
and Asbestiform tremolite, El Dorado County, California).
23
THURLBECKS PATHOLOGY OF THE LUNG, at 811 (Andrew M. Churg, et al. eds., 3d ed. 2005) (hereafter
THURLBECKS).
NAI-1503168250 -13-
chrysotile into short particles that clear from the body in hours, days or weeks, long amosite and
crocidolite fibers are not broken into shorter fibers and persist for decades.24
There is no valid dispute that, if chrysotile causes mesothelioma at all, its potency is
substantially lower than the potency of amphiboles. In 2015, a World Health Organization
monograph (authored by a group of scientists that includes pathologists who testify for plaintiffs
in the tort system) stated that chrysotile is 100 to 1,000 times less potent than amphiboles.25
Even long-time plaintiffs expert Dr. Arnold Brody testified he does not dispute that the
amphiboles are 500 times more potent mesothelioma-causing agents than chrysotile.26 In short,
as the Court held in Garlock, it is clear under any scenario that chrysotile is far less toxic than
other forms of asbestos.27
B. Mesothelioma Is the Primary Asbestos-Related Disease Driving Litigation

Costs
Virtually everyone in the United States has been exposed to low levels of asbestos.
Through the process of natural erosion from wind and weather, and as a result of urban
development, asbestos is in the air and water, even today.28 However, as with many dusts, it is
only when asbestos exposures are high enough to overwhelm the bodys defenses that
asbestos-related disease occurs. An estimated 13 to 21 million workers through the 1970s
experienced heavy exposure to asbestos because they applied, installed or used certain fiber
24
T.A. SPORN, THE MINERALOGY OF ASBESTOS, IN PATHOLOGY OF ASBESTOS-ASSOCIATED DISEASES 7
(Tim D. Oury et al. eds., 3d ed. 2014).
25
WORLD HEALTH ORGANIZATION, WHO CLASSIFICATION OF TUMOURS OF THE LUNG, PLEURA, THYMUS
AND HEART 156 (William D. Travis et al., eds., 4th ed. 2015) (hereinafter, WHO 2015) (noting a
difference of 2-3 orders of magnitude).
26
Deposition of Dr. Arnold Brody in In re Garlock, on May 31, 2013 at 75:22-76:16.
27
In re Garlock, 504 B.R. at 75.
28
THURLBECKS, supra note 23, at 811-13.
NAI-1503168250 -14-
releasing asbestos-containing products, or worked in proximity to other workers who did.29 In
particular, workers in some trades, including insulators, construction workers, factory workers,
shipyard workers, boilermakers, pipefitters, welders and laggers, were exposed to large amounts
of airborne asbestos fibers released by products like asbestos insulation, cement pipes and
fireproofing.30
Several diseases have been the basis for asbestos-related personal injury claims by these
individuals over the years. Yet, as Garlock recognized, pleural mesothelioma is the disease that
has been the focus of the asbestos litigation in recent years.31 Thus, mesothelioma claims will be
the most significant to the resolution of this proceeding.
Mesothelioma is a cancerous tumor in the lining of the lung.32 Mesothelioma is rare, but
excess incidence of mesothelioma has been documented in association with certain occupations,
such as those manufacturing amphibole products or working in settings with high exposures to
amphibole-containing insulation.33 Yet, the association of mesothelioma with amphibole
asbestos exposure does not mean that asbestos exposure is required to cause mesothelioma.
Other naturally-occurring substances have been implicated as mesothelioma-causing agents, and
there is general consensus that certain kinds of therapeutic radiation can cause mesothelioma.34
29
See Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation 6-7 (1991).
30
THURLBECKS, supra note 23, at 812.
31
32
This lining is referred to medically as the pleura and is composed of mesothelial cells. By definition, any
tumor that originates in mesothelial cells is termed mesothelioma.
33
See, e.g., Herbert Seidman, et al., Mortality Experience of Amosite Asbestos Factory Workers: Dose-
Response Relationships 5 to 40 Years After Onset of Short-Term Work Exposure, 10 AM. J. INDUS. MED.
479 (1986); G. Berry, et al., Mortality from all cancers of asbestos factory workers in east London 1933-
80, 57 OCCUP. ENVIRON. MED. 782 (2000).
34
WHO 2015, supra note 25, at 156; Eugene J. Mark & Richard L. Kradin, Pathological recognition of
diffuse malignant mesothelioma of the pleura: the significance of the historical perspective as regards this
signal tumor, 23 SEM. DIAG. PATH. 25, 26 (2006).
NAI-1503168250 -15-
Moreover, like nearly all cancers, mesothelioma can occur for reasons unrelated to asbestos
exposure. A background rate of mesothelioma exists, and cases will occur in the absence of
significant exposure to proven mesothelioma-causing agents. Estimates of the rate of
mesothelioma not caused by asbestos exposure vary.35 For example, it has been estimated that at
least 70-80% of female mesotheliomas are not caused by asbestos exposure.36
C. Chrysotile Containing Joint Compound and Asbestos Disease
Broad consensus has long existed that mesothelioma can be caused by exposure to
products made from the amphiboles crocidolite and amosite, such as the thermal insulation
products that were the focus of the first decades of asbestos litigation. Study after study,
however, has failed to find mesothelioma incidence attributable to chrysotile. For instance,
while early public health warnings were issued about mesothelioma risk for chrysotile miners,
subsequent studies concluded that this observed increase in mesothelioma risk actually was
caused by veins of tremolite or other amphiboles (or amphibole-like minerals) that sometimes
occur in chrysotile mines.37 In fact, there is an absence of reliable studies reporting an increased
35
A recent analysis of U.S. population data reports that the spontaneous or background mesothelioma rate is
at least 27%. Bertram Price & Adam Ware, Time Trend of Mesothelioma Incidence in the United States
and Projection of Future Cases: an Update Based on SEER Data for 1973 Through 2005, 39(7) CRIT. REV.
TOXICOL. 576, 587 (2009).
36
Michele Carbone, et al., Malignant Mesothelioma: Facts, Myths and Hypotheses, 227(1) J. CELL. PHYSIOL.
44, 44 (2012). Notably, Bestwall has faced a disproportionately large and growing number of female
mesothelioma cases in recent years. From 2005 to 2016, the annual number of mesothelioma cases filed by
female plaintiffs against Bestwall doubled. Because recent studies show that the vast majority of female
mesotheliomas are idiopathic (i.e. not connected to any particular cause or exposure), these cases are far
less likely to represent any valid claims that can be attributed to Bestwall. Moreover, women during and
prior to the mid-1970s (when Bestwalls asbestos-containing products were last sold) were unlikely to have
had occupational exposures in heavy industries and shipping. These cases often involve questionable
product identification and exposure claims premised on household do-it-yourself projects. These dated,
private, at-home exposure scenarios are particularly susceptible to questionable product-naming claims.
37
See, e.g., THURLBECKS, supra note 23, at 1006; Alison D. McDonald et al., Mesothelioma in Quebec
Chrysotile Miners and Millers: Epidemiology and Aetiology, 41(6) ANN. OCCUP. HYG. 707 (1997)
(amphibole contamination was likely the cause of the mesothelioma cases of chrysotile miners, as they
tended to occur in mines more heavily contaminated with tremolite).
NAI-1503168250 -16-
incidence of mesothelioma in populations exposed to chrysotile fibers unless there was also
substantial exposure to other suspected mesothelioma-causing minerals. To the contrary, many
studies of groups primarily exposed to chrysotile in mining, manufacturing and use of end
products report no increased incidence of mesothelioma. In the few situations where
mesothelioma is reported in connection with a massive exposure to commercial chrysotile or
chrysotile ore from the sources used by Bestwall, another causative agent such as amphibole
contamination is likely.38
In any case, exposures of chrysotile miners to tremolite-contaminated chrysotile simply
are not comparable to the exposures experienced by end users of chrysotile-containing joint
compound. For one thing, the chrysotile fibers primarily purchased by Bestwall to make joint
compound did not come from mines known to have unusually high tremolite contamination.39
Further, due to the nature of their work, miners experienced exposures many orders of magnitude
higher than professional drywall finishers, the occupation that would have had the most contact
with chrysotile joint compound.40 There are no studies pertaining to chrysotile sources used by
Bestwall showing an increased incidence of mesothelioma at the levels of exposure typically
alleged by Bestwall claimants with the most contact with Bestwalls products. Moreover, until
2012 there were not even reports of individual cases allegedly attributable to joint compound
38
See, e.g., THURLBECKS, supra note 23, at 1006.
39
And in any case, chrysotile significantly contaminated with tremolite appears to be uncommon in
manufactured products. Asbestos and Its Diseases 23, 192 (John E. Craighead & Allen R. Gibbs eds.,
2008).
40
For instance, Canadian chrysotile miners at risk for mesothelioma experienced an average cumulative
exposure of 600 fiber-years to tremolite-contaminated ores. See John T. Hodgson & Andrew Darnton,
The Quantitative Risks of Mesothelioma and Lung Cancer in Relation to Asbestos Exposure, 44(8) ANN.
OCCUP. HYG. 565, 565 (2000).
NAI-1503168250 -17-
exposure in the literature.41 In 2012, Plaintiff expert James Dahlgren purported to publish the
first case reports involving three drywall workers (the Dahlgren Article).42 Plaintiffs
repeatedly used the Dahlgren Article against Bestwall for the next several years but, as discussed
herein, his claim that the workers in the study were only exposed to joint compound is not
accurate.
Notably, the kinds of claimants who have begun to dominate the claims asserted against
Bestwall experienced exposures orders of magnitude lower than the exposures experienced by
professional drywall finishers. Many of Bestwalls claims now come from claimants who allege
they (a) only used joint compound occasionally on the job, (b) used joint compound once or a
handful of times on home projects, (c) were bystanders to joint compound work on construction
sites or home projects or (d) were exposed when workers brought home fibers on their clothing.
Like Garlocks products, Bestwalls products resulted in a relatively low exposure to asbestos to
a limited population, of a relatively less potent chrysotile asbestos.43
IV. The History of Asbestos Litigation Against Bestwall
Bestwall has been an asbestos defendant since at least 1979, and for the first 20 or more
years, it remained a minor one. For the better part of those two decades, Bestwall was sued in
relatively few mesothelioma lawsuits, paid very few claims and paid comparatively small
amounts to settle them. That would all change in the early 2000s.
41
A modest number of case reports . . . is not what would be expected if there was a significant increased
risk. Hollander v. Sandoz Pharms. Corp., 289 F.3d 1193, 1211 (10th Cir. 2002) (quoting Siharath v.
Sandoz Pharms Corp., 131 F. Supp. 2d 1347, 1361 (N.D. Ga. 2001)).
42
Dahlgren & Peckham, Mesothelioma associated with use of drywall joint compound: a case series and
review of literature, INTL J. OF OCC. AND ENV. HEALTH (2012).
43
NAI-1503168250 -18-
A. The Bankruptcy Wave Forever Altered Asbestos Litigation
During 2000 and 2001, the most prominent defendants in the asbestos litigation sought
bankruptcy protection. Ten years earlier, the Judicial Conference Ad Hoc Committee on
Asbestos Litigation appointed by Chief Justice Rehnquist already had described the asbestos
litigation as a disaster of major proportions to both the victims and the producers of asbestos
products and concluded that civil courts were ill-equipped to handle the avalanche of
claims.44 And whether that disaster was wrought by abuses involving mass screenings of
potential claimants and bogus diagnoses of the disease or otherwise,45 the most-sued defendants
began taking their leave of the tort system in 2000 and establishing trusts under section 524(g) of
the Bankruptcy Code.
These top-tier defendants included well-known names like Babcock & Wilcox Co.,
Pittsburgh Corning Corporation, Owens Corning Fiberglas, Fibreboard, Armstrong World
Industries, W.R. Grace & Co., USG Corp., Federal Mogul and GAF. Many manufactured
the amphibole-containing insulation products that actually caused asbestos-related
mesotheliomas. Some were part of a defense consortium known as the Center for Claims
Resolution, which to that point, and together with the top tier defendants, had made most of the
payments to mesothelioma plaintiffs.46
These bankruptcies precipitated dozens of other bankruptcies. Indeed, almost all of the
top tier defendants eventually filed for bankruptcy protection. The resulting wave of filings is
shown below:
44
Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation 2 (1991).
45
46
See id. at 83 (The combination of the bankruptcies of the remaining big dusties and the dissolution of the
Center for Claims Resolution removed from the system most of the funding for liability payments.).
NAI-1503168250 -19-
With these companies in bankruptcy, others became targets. As described below, there is
compelling evidence that asbestos plaintiffs, at a minimum, inconsistently and selectively
disclosed exposure evidence to support or strengthen their cases against non-bankrupt
companies.47 They targeted non-bankrupt companies even though the companies participating in
the bankruptcy wave eventually emerged from bankruptcy under reorganization plans that
provided for the creation of asbestos trusts funded with assets valued at over $30 billion.
Plaintiffs and their lawyers named the non-bankrupt defendants in civil cases and pursued trust
recoveries, too. To avoid discovery of conflicting product identification and exposure claims,
plaintiffs lawyers in many cases (1) delayed filing trust claims until after resolving their claims
47
See id. at 84.
NAI-1503168250 -20-
against tort system defendants48 or (2) relied on confidentiality provisions in Trust Distribution
Procedures (TDPs), which govern how claims may be brought against those trusts. A fuller
discussion of these tactics will follow; the bottom line is that, as a result, Bestwall experienced
an immediate, substantial and unmistakable jump in case filings and related defense and
indemnity costs.
B. Bestwalls Mesothelioma Claims Experience Post-Bankruptcy Wave Is

Telling
Bestwalls mesothelioma filings nearly doubled from 1999 to 2000, increasing from more
than 400 in 1999 to more than 800 in 2000. By 2003, mesothelioma filings were almost 1,600
nearly quadrupling from 1999. In 2013, mesothelioma filings reached an all-time high of
almost 2,000, nearly five times the level in 1999.
48
See id.
NAI-1503168250 -21-
The number of cases in which plaintiffs claimed to have been exposed to Bestwall
products as indicated by the number of cases in which Bestwall made a payment also
multiplied. The number of claims Bestwall paid increased from approximately 140 in 1999 to
more than 400 in 2001 and over 900 in 2004. Between 2013 and 2016, Bestwall paid an average
of over 1,000 mesothelioma claims per yearalmost an eight-fold increase from the late 1990s.
*2017 numbers for the partial year through October 31, 2017
The abrupt increase in both suits against Bestwall and the identification of Bestwall
products had no basis in science or reality. The number of mesothelioma plaintiffs who
historically had been exposed to Bestwall products did not change between 1999 and 2001.
Mesothelioma has a long latency period. Whether the disease manifested and the claimant sued
in 1999 or a few years later, the alleged exposures had to have taken place decades earlier. There
NAI-1503168250 -22-
is not, and never has been, any evidence of any historical exposure spike. With the major payers
now in bankruptcy, however, increasing numbers of plaintiffs began to claim that they
remembered using Bestwall products decades earlier.
These abrupt changes in recall forced Bestwall to defend a significantly higher number of
cases and to pay substantially more in settlements. Whereas Bestwalls average payment for
claims paid prior to 2000 was about $21,000, the average payment for such claims in the 2000-
2017 period was about $125,000.
* 2017 numbers for the partial year through October 31, 2017
Revised or suspect recollections and the sudden serial absence of alternative exposure evidence,
especially of amphibole exposure, drove this increase. For a chrysotile defendant like Bestwall,
NAI-1503168250 -23-
[e]vidence of the plaintiffs exposure to other co-defendants products was essential to its
defense and its negotiating position.49 But in many cases, this alternative exposure evidence
was hidden away in the bankruptcy trust system. With these factors creating a greater risk of
loss at trial, Bestwall was forced to pay higher settlements.50
C. The Court in Garlock and Other Courts Expose Inappropriate Conduct in

the Tort System
In time, a number of courts began exposing plaintiffs efforts to unfairly increase the
value of their tort claims against Bestwall and other tort system defendants by failing to disclose
their exposures to asbestos-containing products manufactured by bankrupt defendants.51 The
2014 opinion estimating Garlocks liability for mesothelioma claims directly addresses this issue.
There, the Court found that the last ten years of [Garlocks] participation in the tort system was
infected by the manipulation of exposure evidence by plaintiffs and their lawyers, which
manipulation had a profound impact on a number of Garlocks trials and many of its settlements
such that the amounts recovered were inflated.52
The Court in Garlock also noted that [o]ne of the leading plaintiffs law firms with a
national practice published a 23-page set of directions for instructing their clients on how to
49
See In re Garlock, 504 B.R. at 83.
50
In the many jurisdictions that recognize some form of several liability, the failure to disclose alternative
exposures also subjected Bestwall to more jury verdict risk. It deprived Bestwall of the ability to allocate
shares of liability to codefendants or other responsible parties whose products actually caused disease.
51
See, e.g., Barnes & Crisafi v. Ga.-Pac., Case No. MID-L-5018-08 (AS) (N.J. Super. Ct. June 12, 2012)
(describing the major problem of failure to produce trust claim forms that conflicted with plaintiffs story
in tort case); Brassfield v. Alcoa, Inc., Case No. 2005-61841 (Tex. Dist. Ct. Harris Cnty. Nov. 22, 2006)
(trial continued after defendants discovered undisclosed trust claims); Stoeckler v. Am. Oil Co., Case
No. 23451 (Tex. Dist. Ct. Angelina Cnty. Jan. 28, 2004) (when trust claims were disclosed for the first time
during trial, the court held a chambers conference after which case quickly resolved); Dunford v.
Honeywell Corp., Case No. CL-25113 (Va. Cir. Ct. Loudoun Cnty. Dec. 10, 2003) (judge described as
worst deception he had seen in 22 years a case where plaintiff alleged his illness was due solely to
friction product exposure, but had made trust claims against many additional defendants).
52
NAI-1503168250 -24-
testify in discovery. Id. at 84. The memo gave plaintiffs a script for depositions, including ten
pages of detailed product descriptions for plaintiffs to memorize. It explained to clients that
[h]ow well you know the name of each product and how you were exposed to it will determine
whether that defendant will want to offer you a settlement.53
The Court in Garlock found that after the bankruptcy wave of the early 2000s, often the
evidence of exposure to . . . insulation companies products also disappeared. This occurrence
was a result of the effort by some plaintiffs and their lawyers to withhold evidence of exposure to
other asbestos products and to delay filing claims against bankrupt defendants asbestos trusts
until after obtaining recoveries from Garlock (and other viable defendants).54
The Court found that in 15 settled cases where the Court allowed full discovery of
the case records, Garlock demonstrated that exposure evidence was withheld in each and every
one of them.55 The evidence showed repeated and wide-ranging inconsistencies between the
story plaintiffs told Garlock and trial courts in tort cases and the story they (confidentially) told
trusts and the bankruptcy courts that established them to pay the bankrupts liabilities. The Court
found that Garlock identified 205 additional cases where the plaintiffs discovery responses
conflicted with one of the Trust claim processing facilities or balloting in bankruptcy cases. Id.
at 85-86. Bestwall has been the subject of these same tactics.
53
Copy of Baron & Budd Memo, attached to Judiciary Committee Report on the Fairness In Asbestos Injury
Resolution Act of 2003, Senate Rpt. 108-118, at 109 (Baron & Budd Memo). Reportedly, members of
the firm separately encouraged clients to avoid identifying the products of bankrupt defendants. Christine
Biederman, Thomas Korosec & Julie Lyons, Toxic Justice, DALLAS OBSERVER (Aug. 13, 1998) (former
Baron & Budd paralegal describing discouragement of identification of Johns-Manville exposure).
54
In re Garlock, 504 B.R. at 84. The Court further observed that an asbestos plaintiffs lawyer stated his
practice as seemingly some perverted ethical duty: My duty to these clients is to maximize their recovery,
okay, and the best way for me to maximize their recovery is to proceed against solvent viable non-bankrupt
defendants first, and then, if appropriate, to proceed against bankrupt companies. Id.
55
Id. (emphasis in original).
NAI-1503168250 -25-
D. This Inappropriate Conduct Appears to Have Occurred in Cases Against

Bestwall
The Garlock record itself shows that plaintiffs denied or failed to disclose evidence of
exposures to amphibole asbestos in their tort cases against Bestwall in the same way they did
against Garlock. Although many plaintiffs alleged and testified in their tort cases that they had
been exposed exclusively to joint compound or chrysotile asbestos products, in their confidential
submissions to bankruptcy courts and trusts, the same plaintiffs attested to exposures to
dangerous amphibole-containing products.
Joint compound manufacturers like Bestwall are especially vulnerable to these practices.
Industrial products like those manufactured by Garlock generally were used only on ships or in
industrial settings. In these settings, records or other evidence of product use during specific
time periods and at specific job sites were more often available, and only workers were likely to
be present. Thus, most defendants had the ability to assert a product-identification defense based
on product-use records and records of a particular plaintiffs employment at specified industrial
work sites. Joint compound products, however, were used in commercial construction,
residential construction and do-it-yourself home projects for which records of product sales,
product use and the presence of the plaintiff during specific timeframes do not exist.
Thus, to pursue a claim against Bestwall, a plaintiff need only claim to recall working
with or being around the product, either on the job or at home, and, unlike many other
defendants, Bestwall often had no records with which to counter product identification. Baron &
Budd provided detailed instructions to its clients about how to construct convincing testimony of
joint compound exposure:
JOINT COMPOUND: Joint compound was white or off-white and came in two
different forms. Sometimes it was a powder which came in 5 to 25 lb cardboard
boxes or in heavy paper bags. It also came in paste form, in small cans or in 5
NAI-1503168250 -26-
gallon buckets or pails. Either way, remember to say you saw the NAMES on the
BAGS, BOXES or PAILS. . . . .
[J]oint compound was dusty TWICE, when it was mixed (if it came in powdered
form) and again when it was sanded!
Remember, the names you recall are NOT the only names there were. There were
other names too. These are JUST the names that YOU remember seeing on your
jobsites.56
Query why people who actually used a joint compound product would need these instructions.
The memo also told plaintiffs Do NOT say you saw more of one brand than another, or that one
brand was more commonly used than another. . . . [Y]ou were probably exposed equally to ALL
the brands. You NEVER want to give specific quantities or percentages of any product
names. . . . All the manufacturers sued in your case should share the blame equally!57
The bankruptcy wave flooded Bestwall with claims by plaintiffs who now claimed they
were exposed to Bestwalls products. These claims included not only plaintiffs who alleged
occupational exposure to the products, but also claims from occasional exposure or secondary
exposure plaintiffs, including, for example:
Maintenance workers or laborers who did not use joint compound routinely, but
may have done drywall work for brief periods decades ago;
Plumbers, electricians and other trades people who did not work with joint
compound at all, but claimed bystander exposure from the use by others at the job
site;
Persons claiming non-occupational exposure (do-it-yourself) during home

remodeling or repair; and
Family members of any of those mentioned above who claimed take-home

and/or secondary exposure.
56
Baron & Budd Memo at 117-18 (emphasis added).
57
Id. at 126. The Baron & Budd Memo also instructed the plaintiff that he would always have the upper
hand: Keep in mind that these [defense] attorneys are very young and WERE NOT PRESENT at the
jobsites you worked at. They have NO RECORDS to tell them what products were used on a particular
job, even if they act like they do. Id. at 123 (emphasis in original).
NAI-1503168250 -27-
When the Garlock estimation record was unsealed in 2014, it made public for the first
time trust claims and bankruptcy submissions made by many plaintiffs, including some who filed
claims against Bestwall. The ability to cross reference the Garlock record to plaintiffs suing
Bestwall is limited because, among other things, claimants against both defendants are not co-
extensive and the Garlock record only includes cases in which disease was diagnosed in 2010 or
earlier. However, that record nonetheless contains numerous examples of highly questionable
claiming practices in Bestwall cases, demonstrating that Bestwall was plagued by the same
conduct that injured Garlock after the bankruptcy wave. More extensively available information
presumably would produce many more examples. A few illustrative, claimant-specific examples
from the limited information that Bestwall has obtained to date are summarized below:58
1. Plaintiff No. 1
Plaintiff No. 1 sued Bestwall in Philadelphia in 2009. He testified in deposition that he
used Georgia-Pacific Ready Mix joint compound, as well as joint compounds manufactured by
Kaiser Gypsum and United Gilsonite Laboratories (UGL) during home repairs and
renovations. Kaiser Gypsum and UGL were not in bankruptcy at the time but would file
thereafter. Plaintiff No. 1 claimed to use those three joint compounds equally. In his
testimony, he specifically denied working with products manufactured by then-bankrupts
National Gypsum and U.S. Gypsum even though they were prominent manufacturers of
asbestos-containing joint compound. He identified no exposures to amphibole products.
Plaintiff No. 1 testified that he had no occupational exposure to asbestos whatsoever, including
58
All references to claimant testimony or interrogatory responses represent statements made by each such
claimant in Bestwall tort litigation.
NAI-1503168250 -28-
during his four years in the U.S. Navy, despite time spent aboard destroyers and in shipyards.
Bestwall settled his case in June 2011.59
But in asbestos trust and bankruptcy filings, Plaintiff No. 1 told an entirely different
story:
He submitted no fewer than 17 asbestos trust claims, all based on exposures not
disclosed in his tort case, including claims against the National Gypsum and U.S.
Gypsum trusts and trusts responsible for amphibole insulation, including Johns-
Manville and Owens Corning;
Even before his deposition, his attorneys filed ballots in two bankruptcy cases
based on undisclosed exposures, including in the case of Pittsburgh Corning,
which was responsible for the amphibole insulation Unibestos; and
Less than five months after Bestwalls settlement, his attorneys submitted a
Garlock personal injury questionnaire (PIQ) on his behalf, certifying that he cut
and removed Garlock gaskets and packing in the Navy from 1965 to 1969, which
would have occasioned still further exposure to amphibole insulation found in the
vicinity of the Garlock products.60
When describing similar facts in cases against Garlock, the Court there found that, while
it is not suppression of evidence for a plaintiff to be unable to identify exposures, it is
suppression of evidence for a plaintiff to be unable to identify exposure in the tort case, but then
later (and in some cases previously) to be able to identify it in Trust claims.61
2. Plaintiff No. 2
Plaintiff No. 2 sued Bestwall in Madison County, Illinois in 2005. He testified that he
used Georgia-Pacific and Bondex joint compound during childhood work at his fathers
construction company during the 1960s and elsewhere during the 1970s. The only other product
59
Because Bestwalls settlements were subject to mutual confidentiality agreements, the terms of settlement
are not disclosed in this brief.
60
See In re Garlock, 504 B.R. at 77 (emphasis in original).
61
Id. at 86.
NAI-1503168250 -29-
manufacturers he identified were defendants in the lawsuit. Bestwall settled with Plaintiff No. 2
in April 2006. Like Plaintiff No. 1, his story would change, as well.
Plaintiff No. 2 submitted trust claims or bankruptcy filings claiming exposure to products
from 28 separate companies never identified in his Madison County case against Bestwall:
He submitted a claim to the U.S. Gypsum Trust in which he asserted exposure to

U.S. Gypsum asbestos products, including Ready Mix Joint Compound, Perf-A-
Tape Joint Compound and other products, claiming this exposure occurred at the
very childhood construction site where he had previously testified only Georgia-
Pacific and Bondex joint compounds were used;
He submitted 21 trust claims in all based on other exposures and products not
disclosed in his tort case, including to Babcock & Wilcox rope packing; Carey
Insulation, CareyTemp Pipe Covering and Thermotex Asbestos Cement; Kaiser
Aluminums Vee Block, Plastic K-N, Super D and Vee-Block Mix; and Plisulate
Insulating Cement #101 & #102;
His lawyers filed ballots for him in 9 bankruptcy cases (AC&S, Flintkote,
Fibreboard, GIT, NARCO, Pittsburgh Corning, Owens Corning, Quigley and
W.R. Grace), swearing in each that he was exposed to asbestos in the products of
each company; and
He filed a Garlock PIQ alleging exposure to Garlock gaskets, despite never

disclosing such exposure in his tort case.
3. Plaintiff No. 3
Plaintiff No. 3 sued Bestwall in Los Angeles in 2006. The only asbestos exposures he
identified in his case against Bestwall were six joint compounds he used in the course of
installing kitchen cabinets (Georgia-Pacific, Bondex, Kaiser Gypsum, Hamilton Materials,
Dowman and Paco Quikset). None were bankrupt at the time. He claimed he used all the brands
equally. In his deposition and interrogatory answers, Plaintiff No. 3 swore he had no other
asbestos exposures, including in Cuba, where he lived until age 38. He made this assertion
despite the pervasive use of asbestos on the island. Bestwall settled the case in 2007.
Plaintiff No. 3, like the others, would later tell a very different story when making claims
against bankrupt companies:
NAI-1503168250 -30-
His law firm filed a ballot for him in the Pittsburgh Corning bankruptcy case in
2009, certifying that he was exposed to Unibestos an amosite-containing
insulation or another product for which Pittsburgh Corning was responsible.
In 2009, a separate law firm cast a ballot for him in the Flintkote bankruptcy case
certifying that he was exposed to a product for which Flintkote had responsibility.
Plaintiff No. 3 had specifically denied knowledge of Flintkote joint compound in
his deposition in his Bestwall case.
Plaintiff No. 3s case has import beyond any proceedings involving him. Bestwall
recently determined that he was one of the three individuals featured in the Dahlgren Article
published in 2012 purporting to present three cases of mesothelioma in which the only known
exposure to asbestos was from joint compound. The Dahlgren Article does not identify the
three individuals whose cases are reported, but the match is definitive: Case 1 in the Dahlgren
Article had the same birth date as Plaintiff No. 3, the same diagnosis year, the same medical
details, the same alleged year of first exposure and the same occupations. Moreover, the
principal author of the article was a plaintiffs expert in Plaintiff No. 3s case.
Bestwall has recently confirmed, through matches of birth date, diagnosis year,
occupation, exposure history, medical details, exposure years and death date, that Cases 2 and 3
cited in the Dahlgren Article also were not exposed solely to joint compound or chrysotile
products. Like Plaintiff No. 3 above, each of them filed ballots in bankruptcy cases of
manufacturers of amphibole products, and one lost his trial (in which the principal author of the
Dahlgren Article testified as his expert witness) against Kaiser Gypsum after the jury heard a
defense experts testimony that he was exposed to amphibole products in the Navy.
Significantly, the ballots in Cases 2 and 3 were filed, and the trials occurred, before the Dahlgren
Article was published.
The Dahlgren Article, which claims to identify the first case reports of mesothelioma
associated with exposure to asbestos-containing drywall finishing products, has been cited by
NAI-1503168250 -31-
plaintiff experts in countless Bestwall cases since 2012 for the proposition that joint compound
causes mesothelioma. Needless to say, those citations should cease.
4. Plaintiff No. 4
Plaintiff No. 4 sued Bestwall in Los Angeles in 2006. She testified that she was exposed
to asbestos through her husbands work clothes. The six brands of joint compound her husband
identified (Georgia-Pacific, Bondex, Kaiser Gypsum, Paco, Dowman and Hamilton Materials)
were all manufactured by defendants not then in bankruptcy.62 Plaintiff No. 4 and her attorneys
denied she was exposed to any other asbestos-containing products. Bestwall settled Plaintiff
No. 4s claim in January 2007 shortly before trial was set to begin. Bestwall now knows that:
A few months after Bestwall settled, a different law firm filed a new lawsuit for
Plaintiff No. 4 in Madison County, Illinois. In this lawsuit, she alleged her disease
was caused by asbestos-containing products manufactured by more than two dozen
defendants that did not make joint compound and were never mentioned in the
California suit, including defendants whose products commonly would have been
found in industrial settings near amphibole-containing insulation.
In the Madison County lawsuit, Plaintiff No. 4 disclosed that she had filed trust
claims, even though she had not identified any trust claims or exposures to bankrupts
products in her California case against Bestwall.
Plaintiff No. 4s attorneys filed ballots for her in the ASARCO, Flintkote, Pittsburgh
Corning, Quigley and W.R. Grace bankruptcy cases. None of these defendants products were
identified in Plaintiff No. 4s California case, and Pittsburgh Corning manufactured amphibole-
containing Unibestos insulation.
62
Bondex, Kaiser Gypsum, Dowman and Hamilton Materials have each now filed for bankruptcy.
NAI-1503168250 -32-
5. Plaintiff No. 5
Plaintiff No. 5 sued Bestwall in Alameda County, California in 2009. She claimed direct
and take-home exposure to Bestwall and Georgia-Pacific joint compound from her fathers work
as a contractor and owner/landlord of rental homes. In her deposition, Plaintiff No. 5 testified
that she handled packages of Bestwall, Georgia-Pacific, Dowman, Paco and Kaiser Gypsum joint
compounds. When questioned by defense attorneys, she also remembered U.S. Gypsum joint
compound, but said it was not as familiar as the other brands, and she testified she did not
recognize the name National Gypsum.
Plaintiff No. 5s father also worked as an insulator at shipyards during World War II,
including the Kaiser Shipyard. She admitted in her first deposition that her father brought his
work clothes from the shipyards to where she lived for laundering in a river. She then recanted
that testimony in a later deposition, and testified she did not have personal knowledge of her
fathers shipyard exposure. Bestwall reached a settlement with Plaintiff No. 5 in June 2010.
Mere days after her trial date, Plaintiff No. 5 executed an affidavit to support trust
claims where she attested she saw that my father used USG and Gold Bond joint
compound on a regular basis and handled sacks of USG and Gold Bond joint
compound on a regular basis. She had not identified Gold Bond joint compound in
her tort case and had disclaimed knowledge of its manufacturer, National Gypsum.
In addition, she had testified to limited familiarity with U.S. Gypsum, not regular
use. This affidavit did not mention Georgia-Pacific, Bestwall or the other joint
compounds manufactured by defendants in her tort case.
Contrary to her deposition testimony, the affidavit stated that Plaintiff No. 5 had
personal knowledge of her fathers work as an insulator at the Kaiser Shipyard, and
stated she was very close with my father, always hugged him when he returned
from work, and helped my mother launder his clothing.
Plaintiff No. 5 relied on that shipyard exposure in at least three trust claims. Her
attorneys also submitted a PIQ in the Garlock bankruptcy case attesting to exposure
to Garlock packing through contact with her fathers clothes upon his returning home
from the shipyards.
NAI-1503168250 -33-
Plaintiff No. 5 would go on to file 12 trust claims based on exposures never identified
in her tort case.
Bestwall has uncovered numerous other examples, despite the limited nature of the
information available for Bestwall cases in the Garlock record. Even worse for Bestwall, two
more of Bestwalls longtime joint compound co-defendants filed bankruptcy in 2010 (Bondex)
and 2016 (Kaiser Gypsum, in this Court). Those bankruptcies now have left Bestwall even more
exposed and vulnerable to the product naming and non-naming practices described above.
V. The Enormous Costs and Burdens of the Asbestos Litigation
A combination of factors has placed, and will continue to place, a tremendous and
growing financial strain on the Bestwall business and the business of its affiliates: the relentless
filing of asbestos lawsuits over 40 years, the departure of other defendants (including all major
joint compound defendants) from the tort system, continuing unfair practices in the tort system
and the projection of decades more of the same or worse. This burden manifests itself in the
enormous costs and resources that are devoted to asbestos litigation. The nine-digit annual price
tag for asbestos defense and indemnity costs aggregates to approximately $2.9 billion to date.
Despite longstanding (and successful) efforts to cut costs, improve efficiencies and
resolve cases, the overall costs of the litigation are not improving. All costs savings to date have
been swallowed by the increasing total costs of litigation as measured by defense plus indemnity
spending. In the last two complete years, total costs were the highest in over a decade
approximately $184 million in 2015 and $174 million in 2016 and, through October 31,
Bestwalls total costs in 2017 are even higher at approximately $200 million.
Bestwall manages roughly 50 outside defense firms around the country, including
approximately 35 local counsel and 15 special counsel and trial counsel. From 2012 to 2016, an
average of approximately 660 attorneys, paralegals and other time keepers at these firms billed
NAI-1503168250 -34-
Bestwall approximately 150,000 hours each year to defend Bestwalls asbestos lawsuits. That is
in addition to the time of nearly 40 experts and various data management and discovery vendors.
Despite consistent efforts to negotiate the most favorable rates for its professionals and manage
cases efficiently, the costs of defending asbestos lawsuits in 2016 exceeded $40 million.
Ultimately, Bestwall cannot try the tens of thousands of cases it faces and will face. That
literally would cost billions of dollars in defense fees. Bestwall realistically cannot fully devote
sufficient resources to adequately assess, through discovery or otherwise, the full nature of each
individual lawsuit against it. That would still involve defense costs in the billions of dollars. As
a result, for a long time, Bestwall has been settling claims against it to save defense costs and to
avoid the risks of trial imposed as a result of unfair tort system practices. The Court recognized
this problem in the Garlock case, where it ruled, as a result, that Garlocks settlement history
bore no relationship to its legal liability.
It is very expensive to try cases to verdict and deal with the various issues that arise post-
verdict. From filing to final resolution, cases that go to trial and verdict typically cost hundreds
of thousands of dollars and can exceed $1 million. Accordingly, there is significant pressure to
settle cases to save money even where actual litigation risk otherwise appears remote. Bestwall
has routinely entered into group settlements with plaintiff law firms to settle inventories of cases
for a single upfront payment or for a series of payments based on an overall cost calculus and not
based on the potential trial risk of each particular case. These arrangements with individual
firms have ranged from a few dozen cases to over 1,500 cases at a time. From 2012 to 2016,
nearly a third of all of Bestwalls indemnity payments were made under group settlements.
If Bestwall remained in the tort system, it would expect its financial costs to not only
continue but to increase significantly as more and more potential co-defendants seek the
NAI-1503168250 -35-
resolution of asbestos liabilities in bankruptcy. Every other major joint compound defendant has
utilized bankruptcy, but other major asbestos defendants could yet file bankruptcy cases. Thus,
the prospect that Bestwall could face significant future increases in its settlement and defense
costs as it did after the bankruptcy wave in the early 2000s is very real. Such increases would
not be because of Bestwalls actual liability, but because it would be pursued more frequently
and face increasingly higher settlement demands as plaintiffs seek sources of recovery among the
fewer defendants remaining in the tort system.
The only solution to Bestwalls intractable asbestos problem is section 524(g) a
solution used by all of its primary competitors and specifically enacted by Congress as a means
to fairly and appropriately address mass asbestos tort liabilities. After 40 years of litigation
litigation that has no end in sight Bestwall now needs the help of this Court and
section 524(g) to address a massive, unrelenting burden and obtain a complete and permanent
resolution of its asbestos litigation that, with the input and approval of the plaintiffs, will treat
Bestwall, as well as current and future asbestos claimants, fairly and equitably.
VI. Bestwalls Objectives in the Chapter 11 Case
A. Section 524(g) Provides Bestwall with the Opportunity to Permanently

Resolve Current and Future Asbestos Claims in a Manner That Is Fair and
Equitable
The Supreme Court recognized many years ago that the tort system is not equipped to
fairly address mass asbestos claims, either on a case-by-case basis or through global settlements
under federal class action rules.63 As a consequence, in 1997, it urged Congress to act on the
asbestos litigation problem.64 Congress has never been able to pass legislation that would have
63
See Ortiz v. Fibreboard Corp., 527 U.S. 815, 821 (1999); Amchem Prods., Inc. v. Windsor, 521 U.S. 591
(1997).
64
Amchem, 521 U.S. at 62829 ([A] nationwide administrative claims processing regime would provide the
most secure, fair, and efficient means of compensating victims of asbestos exposure . . . .); Ortiz, 527 U.S.
NAI-1503168250 -36-
created a separate mechanism or process for reviewing and resolving asbestos claims in the tort
system in response to the Supreme Courts urging, although earlier, in 1994, it enacted
section 524(g) of the Bankruptcy Code. It did so specifically to provide a path forward for
companies, like Bestwall, to seek a permanent resolution of an increasing flood of current and
future asbestos personal injury claims.
This provision was modeled on the plan of reorganization ultimately approved in the
Johns-Manville bankruptcy case. In that case, the court confirmed a plan that permanently
enjoined all present and future tort claims against the debtor and channeled them to a
post-confirmation trust for processing and payment. Section 524(g) has created a statutory safe
harbor that enables companies to achieve the same result, i.e., the establishment of a trust for
the payment of current and future asbestos claims and the entry of a permanent injunction that
enjoins such claimants from filing or continuing to prosecute lawsuits against the debtor,
channeling them instead to the trust for review and, if appropriate, compensation.
In order for this safe harbor to be fully available, a number of conditions must be
satisfied. They include the following:
A legal representative must have been appointed to represent the interests of

future claimants.
75 percent or more of current asbestos claimants must have voted to accept the
treatment of asbestos claims proposed under the plan.
The plan must have been approved by a bankruptcy court and a federal district
court.
The asbestos trust to be established under the plan must, among other things:
at 865 (Rehnquist, C.J., concurring) (observing that asbestos litigation cries out for a legislative
resolution).
NAI-1503168250 -37-
Be funded in whole or in part by the securities of one or more debtors

involved in the plan and by the obligation of such debtor or debtors to
make future payments, including dividends; and
Own, or by the exercise of rights granted under the plan be entitled to own
if specified contingencies occur, a majority of the voting shares of each
such debtor, the parent corporation of each such debtor or a subsidiary of
each such debtor that is also a debtor.
Section 524(g)s complete protection requires the active participation of representatives
of current and future asbestos claimants. It requires substantial funding and other commitments
by the debtor. It ultimately requires the approval of a super-majority of current claimants, and no
plan of reorganization seeking to utilize section 524(g) can be implemented without the
imprimatur of two federal courts. Further, section 524(g) contemplates, and chapter 11 requires,
that the company seeking to avail itself of this statutory safe harbor must bear the costs of all the
professionals employed by these representatives to ensure that the interests of the claimants are
fully and zealously represented.
Chapter 11 provides the only option for companies, like Bestwall, that are burdened by
massive numbers of asbestos claims and will continue to shoulder that unceasing burden for
decades more, to pursue a fair and equitable resolution of those claims. It provides the only
forum where claims can be consolidated and resolved on a global basis and where the interests of
future claimants can be considered and protected.
B. Bestwalls Proposed Course of Action in the Chapter 11 Case
Bestwall seeks the establishment of a trust that fairly resolves claims for any injuries
allegedly caused by asbestos-containing products Bestwall manufactured and sold. To achieve
this objective, Bestwall expects to pursue the following courses of action in this chapter 11 case:
NAI-1503168250 -38-
1. Extension or Application of the Automatic Stay
As has been done in numerous prior asbestos chapter 11 cases, Bestwall will immediately
request the entry of an order determining that the automatic stay should be extended or applies to
actions against certain of Bestwalls non-debtor affiliates, which actions seek recoveries on
Bestwall asbestos claims. The purpose of the Debtors bankruptcy filing would be utterly
defeated if the automatic stay were not extended or applied to all actions that seek recoveries on
Bestwall asbestos claims, including actions that seek to do so from non-debtors on a derivative
basis. Courts, including this Court, have consistently granted such injunctions to ensure that,
among other things, the entirety of the asbestos liability is addressed in the chapter 11 case and
the potential for a section 524(g) global resolution is preserved.65
2. Appointments of Asbestos Claimants Committee and Future Claimants

Representative
One of the initial, necessary steps in this chapter 11 case is the appointment of an official
asbestos claimants committee (the ACC). The Debtor is prepared to assist the Bankruptcy
Administrator and the Court with the identification of claimants to serve on the ACC. In that
regard, Bestwall has extensive information on its current claimants counsel that should be
helpful to the Bankruptcy Administrator and the Court in forming the ACC.
After the appointment of the ACC, the Debtor is prepared to quickly commence
discussions with the committee regarding the selection of a future claimants representative
65
In re Kaiser Gypsum Co., Inc., Case No. 16-31602, Adv. No. 16-03313 (Bankr. W.D.N.C. Oct. 7, 2016);
In re Garlock Sealing Techs. LLC, Case No. 10-31607, Adv. No. 10-3145 (Bankr. W.D.N.C. June 7, 2010);
In re Leslie Controls, Inc., Case No. 10-12199 (CSS), Adv. Proc. No. 10-51394 (Bankr. D. Del. July 14,
2010); In re Specialty Prods. Holding Corp., Case No. 10-11780 (PJW), Adv. Proc. No. 10 51085 (Bankr.
D. Del. June 4, 2010); In re Quigley Co., Inc., Case No. 04-15739 (Bankr. S.D.N.Y. Dec. 17, 2004); In re
Combustion Engineering, Inc., Case No. 03-10495 (Bankr. D. Del. March 7, 2003); In re Harbison-Walker
Refractories Co., Case No. 02-2080 (Bankr. W.D. Pa. Feb. 14, 2002); In re W.R. Grace & Co., Case
No. 01-01139 (Bankr. D. Del. May 3, 2001); In re Pittsburgh Corning Corp., Case No. 00-22876 (Bankr.
W.D. Pa. April 16, 2000 and April 22, 2003).
NAI-1503168250 -39-
(the FCR) to represent future asbestos claimants. Bestwall already has identified candidates
that it believes could effectively serve in that role, and intends to share those candidates with the
ACC with the goal of reaching agreement with the ACC on a candidate, from that list or
otherwise, who is acceptable to the parties and the Court. Once the ACC and the FCR have been
appointed and retained their respective professionals, the Debtor plans to move into the next
stage of the case described below.
3. Diligence and Discovery
Bestwall is committed to reorganizing as soon as possible and is prepared to commence
plan negotiations with the ACC and the FCR as soon as reasonably practicable. Bestwall
recognizes, however, that it and the claimants representatives need substantial information to
prepare for meaningful negotiations. Accordingly, Bestwall anticipates that the initial phase of
the case will involve substantial exchanges of information in response to both formal discovery
requests and informal information requests. To expedite this process, Bestwall already has
established a virtual data room that includes a substantial amount of information that the ACC
and the FCR are expected to request. Bestwall is prepared to make that information available to
the ACC and the FCR at the appropriate time without the need for formal discovery but subject
to an agreed-upon protective order.
Bestwall likewise requires information to prepare for plan negotiations. Among other
things, it expects to seek court authorization for the dissemination of personal injury
questionnaires to current claimants. The court in Garlock approved the use of these
questionnaires. Further, Bestwall anticipates filing motions under Bankruptcy Rule 2004 to seek
information from asbestos trusts established in other cases and may file motions under
Bankruptcy Rule 2004 seeking other relevant information from additional sources.
Notwithstanding the potential significant need for all parties to exchange information, whether
NAI-1503168250 -40-
formally or informally, Bestwall is open to the idea of conducting plan negotiations with the
ACC and the FCR without waiting for the completion of the process of exchanging information.
4. Plan Negotiations
Unless a settlement has been reached earlier, once the diligence and discovery phase of
the case is completed, the Debtor will promptly work with the ACC and the FCR to set a
schedule and process for negotiating a plan. In that regard, Bestwall would be willing to
consider mediation if the parties are otherwise unable to reach an agreement. The Debtor is
committed to negotiating a consensual plan of reorganization with the ACC and the FCR as soon
as reasonably practicable and is prepared to devote the resources and time to that process
necessary to maximize the prospects for reaching a settlement.
5. Estimation
If those settlement efforts fail to achieve a resolution, the Debtor will ask this Court to
estimate the aggregate amount of current and future asbestos liability for plan purposes. As in
Garlock, it will seek an estimation of its actual legal liability in respect of asbestos-related
claims, as opposed to an estimate of settlement payments it might likely make if it remained in
the tort system. As the Court determined in Garlock, the Debtors liability should not be
determined by simplistic projections of historical settlement payments Bestwall was forced to
make in the tort system. Instead, its trust funding commitment should be determined based on an
assessment of its actual legal liability, i.e., the extent to which the chrysotile asbestos in
Bestwalls products substantially contributed, if at all, to a claimants disease. The best evidence
of Bestwalls liability for asbestos claims takes into consideration causation, limited exposure
NAI-1503168250 -41-
and the contribution of exposures to other products,66 and, if necessary, an estimation procedure
that fully and appropriately considers all these elements.
If an estimation becomes necessary, the Debtor will work cooperatively with the ACC
and the FCR on a pretrial order that, upon approval of the Court, will govern the estimation
litigation. The Debtor anticipates that the order would provide for additional discovery,
exchanges of expert reports and expert depositions and pretrial motions, including Daubert
motions and dispositive motions. If an estimation trial becomes necessary, Bestwall is
committed to working with the ACC and the FCR to manage the litigation as efficiently and
cost-effectively as possible. Notwithstanding any asbestos estimation litigation, at all
appropriate times Bestwall will continue to explore settlement opportunities with the ACC and
FCR.
6. Plan of Reorganization
Whether with or without an estimation of asbestos liability by this Court, the Debtors
objective is to negotiate and ultimately develop a confirmable plan of reorganization that is both
acceptable to the ACC and the FCR and that resolves both current and future asbestos claims.
The centerpiece of the plan would be the creation of a section 524(g) asbestos trust funded by
Bestwall. The trust would adopt distribution procedures acceptable to the claimants
representatives that would set forth a streamlined process for claimants who meet agreed upon
criteria to promptly receive compensation. Claimants would no longer be required to commence
litigation, with its attendant costs, risks and uncertainties, to resolve their claims against
Bestwall. In addition, Bestwall would no longer have to pay hundreds of millions of dollars for
defense costs.
66
NAI-1503168250 -42-
Conclusion
The Debtor has sought bankruptcy protection to fairly, finally and equitably resolve
present and future asbestos claims against it. Although the Debtor has resolved asbestos claims
in the tort system for over 40 years, the burden of the litigation only worsens and no end is in
sight. Despite its limited use decades ago of chrysotile asbestos, Bestwall continues to be
overwhelmed by claims.
While Bestwall has remained in the tort system, other defendants, including all of its
primary competitors, have filed for bankruptcy, established section 524(g) trusts and received
permanent protection from current and future claims. In the meantime, Bestwall has been forced
to effectively pick up the liability of these former defendants liability for which it has no legal
responsibility. To deal with the barrage of thousands of cases, Bestwall has been compelled to
settle claims to avoid the substantial costs of litigation and the risks caused by the documented
abusive conduct in the tort system.
Chapter 11 provides Bestwall the only option for permanently and globally resolving
asbestos claims in a manner that is fair and equitable to Bestwall as well as all present and future
claimants. With this Courts assistance, and through negotiations with the ACC and the FCR,
the Debtor will endeavor to achieve as soon as possible a fair resolution that finally resolves the
asbestos claims through a confirmed chapter 11 plan of reorganization.
NAI-1503168250 -43-
Dated: November 2, 2017 Respectfully submitted,

Charlotte, North Carolina
/s/ Garland S. Cassada
Garland S. Cassada
N.C. Bar No. 12352
Jonathan C. Krisko
N.C. Bar No. 28625
Richard C. Worf, Jr.
N.C. BAR NO. 37143
ROBINSON, BRADSHAW & HINSON, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246
E-mail: [email protected]
[email protected]
[email protected]
Gregory M. Gordon (TX 08435300)

Dan B. Prieto (TX 24048744)
Amanda Rush (TX 24079422)
JONES DAY
2727 N. Harwood Street
Suite 500
Dallas, Texas 75201
Telephone: (214) 220-3939
Facsimile: (214) 969-5100
[email protected]
[email protected]
(Admissions pro hac pending)
Jeffrey B. Ellman (GA 141828)

Brad B. Erens (IL 620664)
JONES DAY
1420 Peachtree Street, N.E.
Suite 800
Atlanta, Georgia 30309
Telephone: (404) 521-3939
Facsimile: (404) 581-8330
[email protected]
(Admissions pro hac pending)
NAI-1503168250
Cary Ira Schachter (TX 17719900)

Raymond P. Harris, Jr. (TX 09088050)
Erin A. Therrian (TX 24072524)
SCHACHTER HARRIS, LLP
909 Lake Carolyn Parkway, Suite 1775
Irving, Texas 75039
Telephone: (214) 999-5700
[email protected]
[email protected]
PROPOSED ATTORNEYS FOR THE DEBTOR
NAI-1503168250

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Case 17-31795 Doc 12 Filed 11/02/17 Entered 11/02/17 09:41:20 Desc Main

UNITED STATES BANKRUPTCY COURT

INFORMATIONAL BRIEF OF BESTWALL LLC

Gregory M. Gordon Garland S. Cassada

Jeffrey B. Ellman Cary Ira Schachter

Dated: November 2, 2017

2. Appointments of Asbestos Claimants Committee and

Amchem Prods., Inc. v. Windsor,

Barnes & Crisafi v. Ga.-Pac.,

Brassfield v. Alcoa, Inc.

Dunford v. Honeywell Corp.

Hollander v. Sandoz Pharms. Corp.,

In re Combustion Engineering, Inc.,

In re Garlock Sealing Techs. LLC,

In re Garlock Sealing Techs. LLC,

In re Kaiser Gypsum Company, Inc.,

In re Leslie Controls, Inc.,

In re Pittsburgh Corning Corp.,

In re Quigley Co., Inc.,

In re Specialty Prods. Holding Corp.,

In re W.R. Grace & Co.,

Ortiz v. Fibreboard Corp.,

Stoeckler v. Am. Oil Co.

Wannall v. Honeywell Intl, Inc.,

United States Code Title 11 Chapter 11 ................................................................................ passim

11 U.S.C. 524(g) ................................................................................................................. passim

16 C.F.R 1304.4 (Dec. 15, 1977) ................................................................................................12

Alf Fischbein, et al., Drywall construction and asbestos exposure,

Alison D. McDonald et al., Mesothelioma in Quebec Chrysotile Miners and

A.N Rohl, A. M. Langer, I. J. Selikoff, and W. J. Nicholson, Exposure to asbestos

Christine Biederman, Thomas Korosec & Julie Lyons, Toxic Justice,

Consumer Product Safety Commission, CPSC Bans Use of Asbestos in Certain

Dahlgren & Peckham, Mesothelioma associated with use of drywall joint

Dave K. Verma & Charles G. Middleton, Occupational exposure to asbestos in

Eugene J. Mark & Richard L. Kradin, Pathological recognition of diffuse

Federal Rule of Bankruptcy Procedure 2004 .................................................................................40

Herbert Seidman, et al., Mortality Experience of Amosite Asbestos Factory

John T. Hodgson & Andrew Darnton, The Quantitative Risks of Mesothelioma

Michele Carbone, et al., Malignant Mesothelioma: Facts, Myths and Hypotheses

Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation

S. Rep. 108-118 (2003), Judiciary Committee Report on the Fairness In Asbestos

T.A. SPORN, THE MINERALOGY OF ASBESTOS, IN PATHOLOGY OF ASBESTOS-

THURLBECKS PATHOLOGY OF THE LUNG

WORLD HEALTH ORGANIZATION, WHO CLASSIFICATION OF TUMORS OF THE

the tort system. Id. at 84.

representatives, Bestwall is committed to achieving as soon as possible a fair and permanent

resolution of these claims through a confirmed chapter 11 plan of reorganization.

This brief will describe:

the history of Bestwalls asbestos litigation, including the disproportionate

the substantial costs and burdens of the asbestos litigation; and

Bestwalls objectives in this proceeding.4

Corporation in 1965. Bestwall Gypsum Company (Bestwall Gypsum), a spin-off of

liabilities from the Bestwall Gypsum business.5

manufactured a limited number of asbestos-containing products, principally joint compound.

compound resulted in a relatively low exposure to asbestos to a limited population.8

the overwhelming majority of asbestos-related claims. In contrast, Bestwall was a relatively

percentage of the asbestos-containing products on the market.

and the limited population that were subject to those exposures.