Kaiser Gypsum insurers renew call for dismissal of Chapter 11 case

By Caroline Salls

Pittsburgh, May 7 – Several insurers renewed a February 2017 request for dismissal of Kaiser Gypsum Co., Inc.’s Chapter 11 bankruptcy cases, according to a motion filed Monday 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 case was not filed in good faith.

The insurers said in Monday’s motion that the events that have transpired since they filed the original dismissal motion “only validates that dismissal of these cases for lack of good faith is warranted.”

“The debtors failed to file a plan of reorganization before the expiration of exclusivity, and, still, 18 months into these cases, have yet to identify any business that would be ‘reorganized’ or operated post-emergence,” the motion said.

“While the debtors have filed a plan term sheet reflecting an agreement reached with the asbestos claimants, the structure to which they have agreed – allowing the claimants to pursue insurance in the tort system – will leave claimants and their insurers in essentially the same position they would have been in had the bankruptcy cases never been filed.”

In addition, the insurers said a plan filed for the Kaiser case earlier this month by asbestos insurer Truck Insurance Exchange “would achieve nothing more than limiting its own liability, which is otherwise limitless.”

The company, an Irving, Texas-based manufacturer of construction and remodeling materials, filed bankruptcy on Sept 30, 2016. The Chapter 11 case number is 16-31602.

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