Fourth Circuit to Hear ‘Two-Step’ Asbestos Bankruptcy Appeal

A Georgia-Pacific unit’s asbestos claimants will make their case to the Fourth Circuit to revive their efforts to toss the company’s controversial bankruptcy.

The US Appeals Court for the Fourth Circuit on Friday agreed to hear a fast-tracked appeal of a bankruptcy court order rejecting the claimaints’ latest bid to end Bestwall LLC’s Chapter 11 case. A committee representing the tort claimants has disputed the case’s legitimacy due to Georgia-Pacific’s use of a strategy called the Texas Two-Step, in which a company shifts its liabilities to a subsidiary that files for bankruptcy.

The claimants want a court to rule on ...