Whittaker receiver seeks dismissal of Chapter 11 bankruptcy case

By Sarah Lizee

Olympia, Wash., May 4 – Whittaker, Clark & Daniels, Inc. should have its Chapter 11 bankruptcy case dismissed, Peter Protopapas, the receiver appointed by the South Carolina Court of Common Pleas for the company, said in a motion filed Wednesday with the U.S. Bankruptcy Court for the District of New Jersey.

As background, in 2004, the company sold off substantially all its operating assets. Since then, the company has had no operations or employees and has existed solely to manage ongoing asbestos litigation and liabilities, doing so outside of bankruptcy court.

On March 3, a South Carolina jury entered a verdict against the company in excess of $29 million, and on March 10, the receiver was appointed.

Whittaker moved to reconsider the order, questioning whether the South Carolina court had jurisdiction to enter the order.

On April 18, the South Carolina court heard and denied the reconsideration motion.

“In so doing, the South Carolina court confirmed from the bench that the receivership order entered on March 10 grants only the receiver the power to file WCD for bankruptcy, and that WCD’s existing board could not approve a bankruptcy filing without the receiver’s consent,” Protopapas said in the motion.

“Eight days later, in direct contravention of the order from the South Carolina court, WCD purported to file this bankruptcy case based upon the purported approval of its board and without the previous knowledge of the receiver.”

The receiver said that, if the filing of the case had been properly authorized, dismissal is warranted because it was filed in bad faith and not for a legitimate bankruptcy purpose, but rather as a litigation tactic to circumvent and wage an improper collateral attack against the order appointing the receiver.

Whittaker, Clark & Daniels is a talc supplier based in Stamford, Conn. The company filed Chapter 11 bankruptcy on April 26 under case number 23-13575.

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