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Mem in Supp of Ford Mot for Access

Mem in Supp of Ford Mot for Access

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Published by Daniel Fisher
Ford motion for access to Garlock bankruptcy files
Ford motion for access to Garlock bankruptcy files

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Published by: Daniel Fisher on Mar 17, 2014
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03/18/2014

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# 3845656_2.Docx
UNITED STATES BANKRUPTCY COURTFOR THE WESTERN DISTRICT OF NORTH CAROLINACHARLOTTE DIVISIONIN RE: ) CASE NO. 10-31607)GARLOCK SEALING TECHNOLOGIES, LLC,
 et al.
 ) CHAPTER 11)DEBTORS. ) Jointly Administered ________________________________________________ )MEMORANDUM IN SUPPORT OF FORD MOTOR COMPANY’S MOTION FOR ACCESS TO RULE 2019 FILINGS AND TO UNSEAL THE EVIDENCE OF“DEMONSTRABLE MISREPRESENTATION”
This Court’s January 10, 2014 Order Estimating Aggregate Liability publishing theCourt’s findings of widespread and demonstrable misconduct by asbestos claimants or their attorneys in litigation against Garlock Sealing Technologies, LLC (“Garlock”). Havingreviewed the scant information presently available, it appears that Ford may have been inducedinto inflated settlements in some of the same cases examined by this court. This HonorableCourt having found that “[i]t appears certain that more extensive discovery would show moreextensive abuse,” Ford must be granted access to the information currently under seal. (Dkt. No.3296 at 35, ¶ 66.) Indeed, this pattern of misrepresentations may have affected Ford incircumstances not yet ascertainable. (Dkt. No. 3296 at 35, ¶ 66.) For that reason, Ford seeks anorder authorizing access both to the Rule 2019 Statements and Exhibits filed on behalf of asbestos claimants by various law firms (Rule 2019 Filings),
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and to the sealed testimony andexhibits found pertinent to this Court’s finding of “widespread” “demonstrablemisrepresentation” by asbestos claimants and their attorneys (the Sealed Evidence). (Dkt. No.3296 at 7, 34-35, ¶¶ 8, 66.)
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These include all materials, in whatever form, provided the Court in accordance with itsOctober 25, 2010 and March 16, 2012 orders. (Dkt. Nos. 631, 2037.)
Case 10-31607 Doc 3378 Filed 03/14/14 Entered 03/14/14 15:33:12 Desc Main Document Page 1 of 15
 
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JURISDICTION AND VENUE
1. As Ford seeks access to documents before the Bankruptcy Courts of the UnitedStates concerning the administration of a bankruptcy estate,
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28 U.S.C. Sections 157(b)(2)(A)and 1334 afford this Court jurisdiction. And venue is properly lodged in this Court.
 See
 28U.S.C. § 1409. Finally, this Court’s authority to restrict access to papers filed in this proceedingis statutorily governed by 11 U.S.C. § 107 and Fed. R. Bankr. P. 9018.
RELEVANT FACTS
2. Ford Motor Company is an automobile manufacturer with its principal place of  business in Dearborn, Michigan. Established in 1903, Ford manufactures millions of automobiles for personal and commercial use annually.3. Although medical and epidemiological research conducted over the past threedecades has consistently found no increased risk of asbestos-related disease among professionalauto mechanics, Ford has nonetheless found itself named as a defendant in asbestos cases where plaintiffs claimed to have worked with or around chrysotile-containing brake pads.4. Ford has been a co-defendant with Garlock to claims of asbestos-related injurieson numerous occasions.5. This Court’s January 10 Order demonstrated that no fewer than 15 asbestosclaimants, and every one about which the Court permitted full discovery, were not disclosingalternative sources of asbestos exposure, their other asbestos bankruptcy trust claims, and other compensation in order to increase their total recovery and extract larger payouts from solventdefendants such as Garlock and Ford. On information and belief, Ford suspects that by reason of 
2
Although the asbestos claimants are exclusively creditors of Garlock, Garrison LitigationManagement Group, Ltd., and the Anchor Packing Company are also debtors in these jointlyadministered case.
Case 10-31607 Doc 3378 Filed 03/14/14 Entered 03/14/14 15:33:12 Desc Main Document Page 2 of 15
 
3these misrepresentations, it and other defendants may have been misled into paying inflatedsettlements.6. The Order Estimating Aggregate Liability specifically referenced, withoutidentifying them, “fifteen plaintiffs represented by five major firms” as having filed and settledcases against Garlock for asbestos exposure, obtaining “large sums,” without disclosing toGarlock many, and in some cases any, of their other asbestos exposures. (Dkt. No. 3296 at 31,34-35, ¶¶ 58, 65-66.) On average, these claimants disclosed to Garlock only two other sourcesof asbestos exposure and withheld approximately nineteen other sources, all bankruptcy trusts,which they promptly filed claims against post-settlement. (Dkt. No. 3296 at 31, 34, ¶¶ 58(c),65.)7. On information and belief, Ford, like Garlock, resolved a number of those sameasbestos claims and did so in reliance upon similar misrepresentations of asbestos exposures andasbestos trust claims. However, the evidence upon which this Court found systematicmisrepresentations remains under seal. (Dkt. Nos. 1225, 1390, 1829, 2337, 2338, 2430, 2704,2807.) The Court’s continued seal is preventing Ford access to information it needs toadequately investigate the nature of potential frauds.8. The Court’s Order also referenced, without further development, “205 additionalcases where the plaintiff’s discovery responses conflicted with one of the Trust claim processingfacilities or balloting in bankruptcy cases,” and approximately 80 cases in which asbestosclaimants had misrepresented their exposure evidence and “Garlock paid recoveries of $250,000or more” to settle those claims. (Dkt. No. 3296 at 35, ¶ 66.)9. On information and belief, among those cases, and the thousands of asbestosclaimants who are listed as creditors of Garlock in the Rule 2019 Statements and Exhibits filed in
Case 10-31607 Doc 3378 Filed 03/14/14 Entered 03/14/14 15:33:12 Desc Main Document Page 3 of 15

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