Kaiser Gypsum and Hanson Permanente secure Fourth Circuit decision re-affirming confirmation of reorganization plan

Client(s) Hanson Permanente Cement, Inc. and Kaiser Gypsum Company

On behalf of the Kaiser Gypsum Company and Hanson Permanente Cement, Jones Day successfully urged the Fourth Circuit, on remand from the U.S. Supreme Court, to re-affirm the confirmation of a reorganization plan and reject the challenges of one of the companies' insurers.

 Kaiser Gypsum and Hanson Permanente are subsidiaries of Heidelberg Materials, one of the world's largest manufacturers of building materials. Under their joint plan of reorganization, the companies, represented by Jones Day, resolved substantial asbestos-related liabilities by creating and funding a trust. The plan was unanimously supported by the asbestos claimants, recommended by the bankruptcy court, and approved by the district court. The Fourth Circuit affirmed, but the Supreme Court reversed its decision, holding that one of the companies' insurers had the right under the Bankruptcy Code to challenge the plan. On remand, the Fourth Circuit after supplemental briefing and further argument again affirmed, in a unanimous published opinion, this time rejecting the insurer’s arguments on the merits of the plan. The court agreed with Jones Day that there was "no reversible error" in the district court's conclusion that the plan "was proposed in good faith" and "satisfies" the "various requirements" for creating an asbestos trust. Instead, the Fourth Circuit emphasized, there was "nothing in the record to suggest" that the challenged aspect of the plan "was rooted in anything remotely resembling bad faith."

Truck Insurance Exchange v. Kaiser Gypsum Co. Inc., No. 22-1079 (U.S.); No. 21-1858, (4th Cir.)