Georgia-Pacific Ruling Complicates Tort Bankruptcy Debate

The Fourth Circuit’s decision allowing Georgia-Pacific to avoid being sued for certain asbestos-related claims adds more fuel to an ongoing debate over some financially healthy corporations’ controversial legal strategy to use bankruptcy to resolve mass tort liabilities.

The appeals court determined last week that a North Carolina bankruptcy court had the jurisdiction to shield pulp maker Georgia-Pacific LLC from litigation while its affiliate, Bestwall LLC, is in bankruptcy. Georgia-Pacific created Bestwall in 2017 to funnel and resolve claims alleging its asbestos-containing products caused cancer.

The US Court of Appeals for the Fourth Circuit’s June 20 ruling joins a growing body ...