Related News:
Pfizer's Quigley Unit Is Denied Permission to Exit Bankruptcy by Judge
Pfizer Inc.’s Quigley unit, a former asbestos maker, was denied permission to exit bankruptcy by a judge who found the world’s largest drug company manipulated the bankruptcy process to benefit itself.
U.S. Bankruptcy Judge Stuart M. Bernstein in New York today rejected Quigley’s fourth reorganization plan and said parties should discuss dismissal of the case. He said the plan was filed in “bad faith” by Pfizer and cited testimony that asbestos claims directed at Quigley could total $4.45 billion over the next 42 years.
“In a nutshell, Pfizer bought enough votes to assure that any plan would be accepted,” Bernstein wrote.
In a 90-page ruling that covers Pfizer’s failed attempts to deal with its growing asbestos liabilities since June 1985, Bernstein noted that a lawyer who represented both Quigley and Pfizer settled claims against Quigley and got releases for Pfizer at no additional cost.
Settling claimants were then given a financial incentive to vote in favor of Quigley’s bankruptcy plan through a series of legal moves before and after the bankruptcy filing, the judge wrote.
“We are disappointed in the court’s ruling as we continue to believe that Pfizer has no liability for Quigley’s conduct,” a Pfizer spokesman, Chris Loder, said in a telephone interview.
Bernstein also denied a motion to seal settlements of asbestos liabilities among Pfizer, Quigley and law firms.
Right to Know
“The public has the right to know how much they were paid to vote in favor of the Quigley’s plans,” the judge wrote.
Under the proposed Chapter 11 plan, Pfizer would have paid about $450 million into a trust to satisfy claims about products for which it allegedly has derivative liability.
The bankruptcy code would direct all future claims to the trust, covering death and personal injury claims over Insulag, Panelag and Damit, Quigley products for the steel industry containing asbestos that were made from the time of World War II to the 1970s.
The plan barred claimants from taking future actions against Pfizer. Pfizer was a defendant in 280,343 of the 411,100 claims served against Quigley, Bernstein noted.
“The Pfizer settlements were part of a strategy, conceived and executed in bad faith, to manipulate the vote in this case,” Bernstein wrote.
Quigley, founded in 1916, made three products containing asbestos from the 1940s to the 1970s. It was bought by Pfizer in 1968.
Products With Asbestos
Pfizer, before it streamlined its business to focus on pharmaceuticals, also made asbestos-containing products including Kilnoise, an acoustical plaster, and Firex, an insulation for armaments in the military. Its liability policies gave joint coverage to itself and Quigley.
First named as a defendant in asbestos claims in 1979 or 1980, Quigley was named in 411,100 personal-injury claims and 131,500 civil actions by the time it filed bankruptcy. In September 1992, Quigley sold all its operating assets to Specialty Refractories Inc. and didn’t operate at all until it entered Chapter 11 protection.
Quigley’s only activity has been processing asbestos claims while in bankruptcy since 2004. Bernstein’s ruling comes months after a 15-day trial that pitted the U.S. government and asbestos victims against Pfizer.
The case is In re Quigley Co., 04-15739, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Tiffany Kary in New York Bankruptcy Court at tkary@bloomberg.net.
Rate These Stories
Rate this Page