Asbestos Victims Seek to Unwind CertainTeed’s ‘Texas Two-Step’

A receiver should be appointed to unwind part of a “Texas Two-Step” strategy employed by building-materials maker CertainTeed LLC that allowed the company to place its asbestos claims into bankruptcy via a newly-created spinoff, asbestos victims said.

The receiver should be empowered to nullify CertainTeed’s “divisional merger” that created its spinoff, DBMP LLC, and ultimately provide victims with more direct access to CertainTeed’s assets, a committee of asbestos tort claimants told a Western North Carolina bankruptcy court judge on Saturday. CertainTeed is a subsidiary of industrial glassmaker Saint-Gobain SA.

The committee’s complaint is the latest salvo in the fight between ...