The Role of a Futures Representative in Chapter 7 Liquidation Proceedings
Written by J. Gregg Miller, Esq.
Pepper Hamilton LLP

The appointment of a legal representative for persons that might assert post-confirmation “demands” for payment of asbestos damages is mandated by Bankruptcy Code Section 524(g) as a pre-condition to a channeling injunction to supplement a chapter 11 discharge. The condition is expressed as follows in Section 524(g)(4)(B):

. . . [S]uch injunction shall be valid and enforceable . . ., if –

(i) as part of the proceedings leading to issuance of such injunction, the court appoints a legal representative for the purpose of protecting the rights of persons that might subsequently assert demands of such kind . . .

Excerpts From Address by Hon. Griffin B. Bell
2003 ABI Annual Spring Meeting

For every sick claimant who sues, there are many more claimants seeking money who are not sick. Asbestos litigation now stands as the only part of our tort system in which people who can show no real physical injury are routinely allowed to sue.

It is not right that healthy plaintiffs overwhelm the courts in such numbers that many mesothelioma cancer victims will not live to have their day in court.

It is not right that legitimate and frivolous claims are grouped together in massive inventories at the expense of due process.

It is not right that defendants must pay persons not actually hurt – or not hurt by them.

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