Two creditors of Owens Corning are attempting to remove U.S. District Court Judge Alfred M. Wolin from his supervisory role in asbestos-related issues. The creditors called 10 October 2003 for the rem…
Two creditors of Owens Corning are attempting to remove U.S. District Court Judge Alfred M. Wolin from his supervisory role in asbestos-related issues. The creditors called 10 October 2003 for the removal of Wolin from his asbestos litigation oversight role in five Chapter 11 cases filed in the U.S. Bankruptcy Court in Wilmington, Delaware, due to an alleged conflict involving lawyers he appointed to advise him. It is alleged that the lawyers have been representing the interests of future asbestos claimants in another important asbestos bankruptcy case, the Chapter 11 case of G-I Holdings Inc. in the U.S. Bankruptcy Court for the District of New Jersey. That dual role makes Wolin“s advisers “partisan advocates who have a material interest in the outcome” of the five Wilmington cases, according to a motion filed 10 October 2003 by Kensington International Ltd. and Springfield Assoc. LLC, holders of more than USD 275 million in debt in the Owens Corning case. According to court papers, the creditors said undisclosed conflicts by the advisers, C. Judson Hamlin and David Gross, affect Wolin“s impartiality and require him to end his participation in the Wilmington asbestos cases, where he has played a key role. Wolin handles asbestos-related claims issues in the Owens Corning case and four other important Chapter 11 cases in Wilmington: Armstrong World Industries Inc., W.R. Grace & Co., Federal-Mogul Global Inc. and USG Corp. Wolin was appointed in November 2001 to share jurisdiction with bankruptcy judges over the cases in Wilmington, which present challenges to litigation management associated with asbestos claimants in addition to the complexities of large Chapter 11 bankruptcies involving thousands of ordinary creditors. In December 2001, Wolin appointed five consultants to help him coordinate management of the five cases, covering many thousands of compensation claims for asbestos-related injuries. Among the advisers Wolin named were Hamlin, a retired New Jersey judge, and Gross. According to the creditors“ motion to recuse Wolin, the advisers were already representing present and future asbestos claims in the G-I Holdings Chapter 11 case, involving the same issues and possibly even some of the same claims as the Wilmington case. The motion said Hamlin and Gross have used their special role as Wolin“s advisers to influence the court in the G-I Holdings case. Wolin“s consultants “have even gone so far as to tell the court in the G-I case how this court (Wolin) will rule on issues in the future, and to use that yet-to-be-issued decision as precedent for how the G-I court should rule,” the motion said. Hamlin and Gross told the judge supervising the G-I Holdings Chapter 11 cases of their involvement as advisers in the Owens Corning case and the other Wilmington cases, the recusal motion said. But the advisers did not tell Owens Corning creditors that they were representing asbestos claimants in the G-I Holdings case, it said. By the spring of 2003, Gross had charged nearly USD 600,000 in services to the five Wilmington asbestos cases, and Hamlin had charged more than USD 30,000, according to court papers. The motion to ask Wolin to end his participation in the Owens Corning case comes at a critical point for the case and an active juncture for other Wilmington asbestos cases. Wolin shares authority over the actions with bankruptcy judges who visit Delaware from other jurisdictions. Wolin, in New Jersey, is considering a crucial motion on how the voting should be conducted on Owens Corning“s reorganization plan. Depending on his decision, asbestos claimants could have to qualify as entitled to vote and be consulted individually. In most asbestos cases, law firms that represent claimants vote for them on Chapter 11 plans, so Wolin“s position on the issues is being scrutinised closely. In the meantime, Chief U.S. Bankruptcy Judge Judith K. Fitzgerald of the Western District of Pennsylvania, visiting in Wilmington, is also set to hear arguments 27 October on Owens Corning voting procedures. According to papers filed by the official committee of unsecured creditors, Owens Corning is asking Fitzgerald to rule on some of the same balloting issues that are before Wolin.