Court Rejects Pfizer’s “Bad Faith”

Court Rejects Pfizer’s “Bad Faith” Attempt to Limit Liability to Asbestos Victims

Many of our clients, as well as thousands of other victims of asbestos disease, were exposed to asbestos products manufactured by a company called Quigley. Because of legal maneuvering on the part of Quigley's parent company, pharmaceutical giant Pfizer, Inc., these families have been forced to stand in line and wait patiently for the justice they deserve. Here's the latest in Pfizer's lawyers attempt to delay, obfuscate, duck, bob and weave.

Earlier this month, a New York bankruptcy judge rejected the latest attempt by Pfizer, Inc. to shake off an estimated $900 million worth of asbestos damages through a Chapter 11 bankruptcy plan for its Quigley unit, which manufactured asbestos containing products from the 1940’s through the 1970’s.

Judge Stuart M. Bernstein refused to confirm Quigley's fourth Chapter 11 bankruptcy reorganization plan on the grounds it would run out of money within five years of paying claims for asbestos injuries and was unfair to some of the most seriously injured asbestos claimants. Judge Bernstein found that Pfizer, the architect, funder and chief beneficiary of Quigley's Chapter 11 plan, engaged in "bad faith" vote manipulation and should not enjoy the benefit of a confirmation ruling that would shield it from damage claims arising from Quigley products.

A maker of “Insulag”, “Panelag” and “Damit” refractory products for iron, steel, power generation, petroleum and other industries, Quigley was acquired by Pfizer in 1968. By 2003, it was out of operation, facing $1.2 billion worth of claims for asbestos damages, with more expected in future decades. In 2004, Pfizer filed for Chapter 11 bankruptcy protection on behalf of Quigley, part of what Judge Bernstein found was a bad faith scheme to "divide and conquer" law firms that represent people with asbestos injuries.

Quigley is one of many companies that resorted to Chapter 11 protection in order to get a reprieve from asbestos injury claims, and gain bargaining advantage with plaintiff's firms. Asbestos bankruptcy plans are generally designed to shield a company from product liability lawsuits by diverting the claims to a trust funded with cash, stock, insurance proceeds and other assets earmarked to cover the anticipated cost of current and future injury claims.

According to Judge Bernstein, Pfizer's $216 million contribution to the Quigley bankruptcy trust was far less than the benefit the company would obtain if the Quigley Chapter 11 plan was confirmed: immunity from more than $900 million in product liability claims.

Judge Bernstein’s ruling will force Pfizer into renewed negotiations if it wants to preserve its immunity from personal injury claims brought by persons injured by Quigley’s asbestos products. At the time it filed for bankruptcy protection in 2004, Quigley had been hit with 411,100 asbestos personal-injury claims. Experts estimated another 261,567 lawsuits would be filed in the coming decades.

If new plan is not approved, the Chapter 11 bankruptcy could be dismissed, allowing all of the pending and future lawsuits against Quigley/Pfizer to proceed.