Kaiser Gypsum insurers seek dismissal of Chapter 11 bankruptcy cases

By Caroline Salls

Pittsburgh, Feb. 22 – Several insurers are seeking dismissal of Kaiser Gypsum Co., Inc. and Hanson Permanente Cement, Inc.’s Chapter 11 bankruptcy cases, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Western District of North Carolina.

The dismissal motion was filed by First State Insurance Co. and New England Reinsurance Corp. and joined by the Insurance Co. of the State of Pennsylvania, Lexington Insurance Co., Granite State Insurance Co., National Union Fire Insurance Co. of Pittsburgh, AIU Insurance Co., Associated International Insurance Co. and TIG Insurance Co.

According to the motion, the Kaiser and Hanson cases were not filed in good faith.

“The debtors have stated that their purpose in filing these cases is to discharge their liabilities and to obtain a permanent injunction protecting them against asbestos claims under section 524(g),” the motion said.

“But that relief is not obtainable for these debtors. Nor would the pursuit of these goals, as ends in themselves, constitute a valid reorganizational purpose in the absence of some identifiable benefit to the debtors’ bankruptcy estates.”

The insurers said the company’s goals cannot be accomplished because they have no meaningful business to reorganize, and “nothing that has thus far transpired in these cases provides any reason to believe that [a consensual plan] is either possible or forthcoming.”

The company, an Irving, Texas-based manufacturer of construction and remodeling materials, filed bankruptcy on Sept 30. The Chapter 11 case number is 16-31602.

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