Oct 24 (Reuters) – A US bankruptcy judge has approved a $535 million settlement between a defunct talc supplier and Berkshire Hathaway’s insurance unit, overruling objections that the deal would provide too little money to resolve lawsuits alleging the company’s talc contained asbestos and caused cancer.
US bankruptcy judge Michael Kaplan in New Jersey on Thursday ruled that Whittaker Clark & Daniels’ settlement was fair and reasonable, based on his evaluation of the talc litigation claims and the claimants’ ability to win judgments against the company’s former corporate parents. The settlement aims to resolve liabilities of Berkshire’s National Indemnity Co., which purchased Whittaker Clark & Daniels and assumed its liabilities in 2007, and other former corporate affiliates like chemical distributor Brenntag.Whittaker filed for bankruptcy in 2023, citing a “deluge” of lawsuits from roughly 2,700 people who alleged the company supplied asbestos-contaminated talc to makers of cosmetics, chemicals and other products, causing cancer.
Talc claimants argued that the settlement was an insider deal between the defunct Whittaker and its corporate owners and affiliates, which resolved those companies’ liabilities without any input from talc claimants. The deal was designed to shield well-heeled companies that could be liable for billions of dollars in talc claims, like National Indemnity Co., Berkshire Hathaway, former corporate affiliate Brenntag, and others with a shared corporate history, according to talc claimants.The talc claimants had asked the court for permission to sue Brenntag, National Indemnity Co., and other potential corporate successors for a higher contribution, but Kaplan denied that request. Kaplan ruled that Whittaker was responsible for suing those companies for indemnification and contribution to the bankruptcy, and that other plaintiffs could not usurp legal claims that were property of the debtor.
Suzanne Ratcliffe, an attorney who represents asbestos claimants in the bankruptcy, said that the ruling was “wrong” and that she planned to appeal.
“This order blesses a greed-fueled insider ‘settlement’ between Whittaker and multi-billionaires — including Berkshire Hathaway affiliates — a settlement which no victim wants or asked for,” Ratcliffe said in a statement.
The talc claimants have filed a petition with the US Supreme Court to challenge an earlier ruling in the case, saying that debtors should not be able to use bankruptcy to block plaintiffs who want to sue a bankrupt company’s non-bankrupt owners. The Supreme Court has not acted on that petition.Whittaker operated one of the largest talc and industrial compound supply and distribution businesses in the US in the 1970s and 1980s, but it ceased operations in 2004. Its corporate existence since then has largely been devoted to resolving a growing wave of legal claims related to its decades-long production of talc and industrial chemicals.
Brenntag acquired Whittaker’s operating assets in 2004, while leaving the asbestos liabilities with Whittaker. National Indemnity Co. later bought Whittaker and assumed its remaining assets and liabilities. Brenntag has denied being responsible for the defunct company’s talc liabilities.
The case is Whittaker Clark & Daniels Inc. et al., US Bankruptcy Court for the District of New Jersey, 23-1357
For Whittaker Clark & Daniels: Chad Husnick and Joshua Sussberg of Kirkland & Ellis LLP, Michael Sirota and Felice Yudkin of Cole Schotz P.C., among others.For the official committee of talc claimants: Arthur Abramowitz of Sherman Silverstein, among others
For talc claimant Juliet Gray: Suzanne Ratcliffe and Clay Thompson of Maune Raichle Hartley French
Reporting by Dietrich Knauth
