Georgia-Pacific Not Paying Asbestos Victims and Their Families
Asbestos victims, their families, and attorneys claim that a Koch Industries owned company and its lawyers are using a bankruptcy technique to avoid paying money to former employees. The company in question, Georgia-Pacific, is a paper and building products company. It has been in a legal battle with victims claiming that asbestos in its products caused cancer. The Koch Brother political network has pushed for legislation to protect companies that are facing asbestos related claims so victims can receive limited payouts. Koch Industries bought Georgia Pacific in 2005. It faces over 60,000 asbestos lawsuits but has not paid anything since 2017 when it did a controversial financial maneuver called the Texas Two-Step.”
The Texas two-step involves dividing a company into two companies and loading all the lawsuit liabilities into the newly formed company. The new company then files for bankruptcy. Georgia-Pacific created Bestwall LLC for the asbestos liabilities. It filed for bankruptcy in 2017. Georgia Pacific has continued with normal operations while all this has gone on. During normal operations, Koch Industries received $2.5 billion in dividends in 2022 from Georgia-Pacific and has received $5 billion in dividends since asbestos liabilities were moved to Bestwall. Lawyers are calling this case a “roadmap for solvent corporations to abuse the bankruptcy system.”
Other companies facing lawsuits have undergone similar splits including Johnson & Johnson, Saint-Gobain, and Trane Technologies. These companies claim it is the best way to compensate victims fairly, but long delays in reaching agreements more likely means it is a way to escape accountability.
Georgia-Pacific made asbestos containing drywall products until the 1970s when it was banned in said products. In 2005, the company was accused of secretly funding research trying to disprove that asbestos containing products were carcinogens. Charles and the late David Koch have funded and supported legislative efforts trying to make it harder for asbestos victims and families to collect compensation. The brothers were longtime backers and donors to the American Legislative Exchange Council (ALEC), which has tried to get these bills passed in at least six states. They also lobbied for less regulation of asbestos.
Georgia-Pacific has been defending and resolving asbestos claims with no financial distress or the need for any bankruptcy protection. They still went through with the Texas two-step maneuver. The point of the maneuver is to either make victims cave and take less money or delay the trial, which is what is happening now. Victims will not see any money until a final plan is confirmed and all appeals are exhausted. Last January a court ruled against Johnson & Johnson, which tried to resolve cancer lawsuits involving its talcum powder with the same two-step process. Lawyers are attempting to have the Bestwall bankruptcy overturned, but the company will be in chapter 11 bankruptcy at least until July since the official court order is still pending until an appeal is filed.
Were you exposed to asbestos and later diagnosed with mesothelioma, lung cancer, or another asbestos related disease? Contact us today by calling 412-471-3980 or by filling out our contact form. A member of our team will get back to you as soon as possible.