THE GILBERT EDGE

Expanding on its significant experience recovering insurance in mass-tort bankruptcy cases, Gilbert LLP was recently retained as Special Insurance Counsel to the Official Committee of Unsecured Creditors (“UCC”) of Kidde-Fenwal, Inc.

Kidde Fenwal filed for bankruptcy in May of 2023, citing the magnitude of liability it faced related to its historic production and distribution of aqueous film-forming foams (“AFFF”). AFFF is a type of firefighting foam which is alleged to contain, or degrade into chemicals containing, per- and polyfluoroalkyl substances (“PFAS”). PFAS, also known as the “forever chemical” because it does not break down in the environment or in one’s body, has been linked to certain types of cancer and other diseases.

Due to the number of claims brought against not only Kidde-Fenwal but other manufacturers and distributors of AFFF, AFFF-related claims were consolidated into a multi-district litigation (MDL) in South Carolina in 2008. The over 4,000 claims currently pending in the MDL have been brought by water providers, individuals, Attorneys General, and others, alleging that defendants, including the debtor, are liable for PFAS water and ground contamination as well as personal injuries that allegedly flow from the contamination.

Kidde-Fenwal is the first company to file for bankruptcy stemming from its AFFF-related liability. In representing the UCC, Gilbert is providing counsel and advice on insurance issues, working with key stakeholders to evaluate, preserve, and maximize insurance recoveries for the benefit of injured claimants. Due to Kidde-Fenwal’s corporate history, available insurance may reach back as far as the 1960s and be substantial in nature.

Gilbert LLP was recently retained by the Claimants Committee in the Chapter 11 bankruptcy proceedings filed by Aldrich Pump LLC and Murray Boiler LLC.  Aldrich and Murray are asbestos liability holding companies formed by the Ingersoll-Rand Co. and Trane Technologies PLC, respectively.  In representing the Claimants Committee, Gilbert is utilizing its expertise in recovering contested insurance funds in mass tort bankruptcy cases.  Aldrich and Murray purport to hold approximately $2.5 billion of insurance coverage.

The debtors in this bankruptcy matter were created through the Texas Divisive Merger Statue, wherein the liabilities and obligations of the dividing entities are allocated among the new entities formed pursuant to the merger.

A federal court has appointed Gilbert LLP as interim co-lead counsel to represent a class of institutional investors in a major lawsuit against ten global banks accused of colluding to rig a critical financial market benchmark.

Like the antitrust and market manipulation scandals involving the foreign exchange market, the London Interbank Offered Rate (LIBOR), and the ISDAfix rate, this lawsuit alleges that ten global banks have been colluding to manipulate the credit default swap “final auction price,” which is the rate that determines the settlement value for credit default swaps.  Institutional investors use credit default swaps like a form of insurance on bond investments, and the final auction price determines how much “insurance” needs to be paid out on swaps.  Artificially deflated final auction prices increase the amount of “insurance” payments the banks receive from their counterparties, while artificially inflated final auction prices decrease the amount of “insurance” payments the banks are obligated to pay to their counterparties.  The credit default swap market has been valued at $8 trillion (in notional value).

In June 2023, the federal court overwhelmingly rejected the banks’ motion to dismiss the case, handing a major early victory to the class. The case is now in discovery.

Gilbert LLP is interim co-lead counsel for the class with Kirby McInerney LLP.  Berger Montague also represents the class.  The New Mexico Attorney General’s Office is co-counsel to the plaintiffs.

Gilbert’s insurance coverage expertise includes the representation of directors, officers, and companies facing securities and shareholder litigation.  Currently, Gilbert represents a corporate client seeking insurance coverage for its settlement of certain director and officer and securities law claims, and is counseling the company in its suit against its insurers in Bermuda court.