Bestwall successfully defends preliminary injunction staying litigation against affiliated third parties during Chapter 11 bankruptcy case
Client(s) Bestwall LLC
Jones Day represents Bestwall LLC, a Georgia-Pacific affiliate, in its Chapter 11 bankruptcy case in the Western District of North Carolina seeking to resolve significant asbestos liabilities by creating a trust under 11 U.S.C. § 524(g) to compensate current and future claimants. Early in the case, the bankruptcy court granted Bestwall's motion for a preliminary injunction staying litigation against affiliated third parties of the same asbestos claims being resolved in the Bestwall case, recognizing that such collateral litigation outside of bankruptcy could jeopardize Bestwall's pursuit of a global resolution of these claims in bankruptcy. Jones Day successfully defended the injunction against an appeal in the district court. Jones Day then successfully defended the injunction in the Fourth Circuit. In a published opinion, the Fourth Circuit panel majority agreed that the bankruptcy court had jurisdiction over Bestwall's motion, applied the proper standard for such an injunction, and did not abuse its discretion in entering it. Both asbestos claimants' representatives petitioned for writs of certiorari to the Supreme Court, with 24 States as amici plus a bipartisan group of three U.S. Senators. Jones Day filed briefs in opposition arguing that the petitions presented no split of authority or important question for review. The Supreme Court denied both petitions in May 2024. The final decision not to disturb the preliminary injunction—five years after the bankruptcy court issued its opinion—is an important step for enabling Bestwall's bankruptcy to progress toward a successful reorganization.
In re Bestwall LLC, 71 F.4th 168 (4th Cir.); Official Committee of Asbestos Claimants v. Bestwall LLC, No. 23-675 (U.S.); Esserman v. Bestwall LLC, No. 23-702 (U.S.)
