(Bloomberg) -- DBMP LLC, an affiliate of building-materials maker CertainTeed LLC, filed for bankruptcy on Thursday in North Carolina, citing tens of thousands of unresolved asbestos-related claims tied to products manufactured prior to 1993.
CertainTeed Corp., a manufacturer of cement pipes, asphalt roofing products and siding shingles, underwent a restructuring in October to establish two entities, DBMP and CertainTeed LLC. DBMP was created solely to handle asbestos claims that were burdening the company while CertainTeed LLC continues to operate and isn’t involved in DBMP’s Chapter 11 proceedings.
“This chapter 11 case was caused by the unceasing and unwarranted filing of thousands upon thousands of asbestos-related claims against the Debtor and Old CT,” Chief Restructuring Officer Robert Panaro said in court papers. “The burden of managing, defending and resolving these claims is substantial, and this litigation and its associated burdens are expected to continue for decades more.”
DBMP listed both debt and assets of as much as $1 billion in its bankruptcy petition, and said it has more than 60,000 asbestos-related claims outstanding. CertainTeed ceased production of all asbestos-containing products in 1993, but continues to accumulate hundreds of claims annually.
In 2018, about 2,600 new asbestos-related claims were filed against CertainTeed in the U.S. Though down from roughly 3,100 in 2017, the company doesn’t see an end date to new claims being filed, Patricia Marie, a spokeswoman for Saint-Gobain, DBMP’s parent company, said in an email.
“Despite the aging of the population and lessening opportunity for claimants to assert legitimate claims of exposure to CertainTeed Corporation asbestos-containing products, naming practices in the tort system continue to result in a steady volume of claims against DBMP LLC, with no foreseeable end in sight,” Marie said.
Asbestos is a group of minerals that can be separated into thin threads and was used for industrial and construction applications. Historically, builders used it widely because it is heat and fire resistant. In 1989, however, the Environmental Protection Agency banned the use of asbestos because its fibers are known to compromise breathing and can lead to mesothelioma, a rare cancer, according to the National Cancer Institute.
Since 2002, CertainTeed’s mesothelioma claims have resulted in about $2 billion in costs, according to Panaro’s declaration. Many of the most prominent asbestos defendants, including CertainTeed’s primary competitors, filed for bankruptcy in the early 2000s, which has led to CertainTeed being named in the majority of mesothelioma lawsuits filed in the U.S., even if the plaintiffs weren’t in contact with CetrainTeed products.
“Only a small fraction of those plaintiffs possibly could have been exposed to any asbestos fibers released from Old CT’s products,” according to an informational brief filed by DBMP.
The goal of BMP’s bankruptcy is to establish a trust that will pay litigant’s claims, while allowing CertainTeed LLC to continue operating, according to court papers.
The filing may enable a “certain, final and equitable resolution of all current and future claims arising from asbestos-containing products manufactured or sold by the former CertainTeed Corporation,” Marie said.
The case is DBMP LLC, 20-30080, U.S. Bankruptcy Court for the Western District of North Carolina (Charlotte)
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